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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K/A

 

 

AMENDMENT TO CURRENT REPORT

 

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported): April 22, 2003

 

 

 

SL GREEN REALTY CORP.

(Exact name of Registrant as specified in its Charter)

 

 

 

Maryland

(State of Incorporation)

 

 

1-13199

 

13-3956775

(Commission File Number)

 

(IRS Employer Id. Number)

 

 

 

 

420 Lexington Avenue

New York, New York

 

10170

 

 

(Address of principal executive offices)

 

(Zip Code)

 

(212) 594-2700

(Registrant’s telephone number, including area code)

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, SL Green Realty Corp. (the "Company") hereby amends its Current Report on Form 8-K, dated April 22, 2003 (filed with the Securities and Exchange Commission on April 23, 2003), to (i) include reconciliations of certain non-GAAP financial measures and the comparable GAAP financial measures discussed, but not previously reconciled, in the Company's press release dated April 22, 2003 as well as the reasons that management believes such non-GAAP financial measures provide useful information to investors and (ii) attach as an exhibit certain supplemental information regarding the Company's operations.

 

 

Item 7.    Financial Statements and Exhibits

 

(c)           Exhibits

 

99.1         Press Release

99.2         Supplemental Package

 

 

Item 9.    Regulation FD Disclosure

 

The information contained in this Item 9 of this Amendment to Current Report is also being furnished pursuant to "Item 12. Results of Operations and Financial Condition" of Form 8-K in accordance with SEC Release No. 33-8216; 34-47583.

 

The information in this Amendment to Current Report  (including the exhibits) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.  This report will not be deemed an admission as to the  materiality of any information in the report that is required to be disclosed solely by Regulation FD.

 

On April 22, 2003, the Company issued a press release announcing its financial results for the first quarter ended March 31, 2003 and held its earnings conference call on April 23, 2003. The Company has made available supplemental information regarding the Company's operations that is too voluminous for a press release.  The Company is attaching the press release (which includes additional reconciliations) as Exhibit 99.1 and the Supplemental Package as Exhibit 99.2 to this Amendment to Current Report.

 

 

2

 

NON-GAAP Supplemental Financial Measures

 

Funds from Operations (FFO)

 

FFO is a widely recognized measure of REIT performance.  Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.  The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company.  The revised White Paper on FFO approved by the Board of Governors of NAREIT in October 1999 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.  We believe that FFO is helpful to investors as a measure of the performance of an equity REIT because, along with cash flow from operating activities, financing activities and investing activities, it provides investors with an indication of our ability to incur and service debt, to make capital expenditures and to fund other cash needs.  FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

 

Funds Available for Distribution (FAD)

 

FAD, is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined in accordance with GAAP.  FAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to fund its dividends.  Because all companies do not calculate FAD the same way, the presentation of FAD may not be comparable to similarly titled measures of other companies.   FAD does not represent cash flow from operating, investing and financing activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity.

 

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

 

The Company presents earnings before interest, taxes, depreciation and amortization (EBITDA) because the Company believes that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company’s ability to incur and service debt.  EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity.

 

 

3

 

Same-Store Net Operating Income

 

The Company presents same-store net operating income on a cash and GAAP basis because the Company believes that it provides investors with useful information regarding the operating performance of properties that are comparable for the periods presented.  For properties owned since January 1, 2002, the Company determines net operating income by subtracting property operating expenses and ground rent from recurring rental and tenant reimbursement revenues.  Same-store net operating income is not an alternative to net income (determined in accordance with GAAP) and same-store performance should not be considered an alternative to GAAP net income performance.

 

Debt to Market Capitalization Ratio

 

The Company presents the ratio of debt to market capitalization as a measure of the Company’s leverage position relative to the Company’s estimated market value.  The Company’s estimated market value is based upon the quarter-end trading price of the Company’s common stock multiplied by all common shares and operating partnership units outstanding plus the face value of the Company’s preferred equity.  This ratio is presented on a consolidated basis and a combined basis.  The combined debt to market capitalization includes the Company’s pro-rata share of off-balance sheet (unconsolidated) joint venture debt.  The Company believes this ratio may provide investors with another measure of the Company’s current leverage position.  The debt to market capitalization ratio should be used as one measure of the Company’s leverage position, and this measure is commonly used in the REIT sector; however, this may not be comparable to other REITs that do not compute the debt to market capitalization ratio in the same manner.  The debt to market capitalization ratio does not represent the Company’s borrowing capacity and should not be considered an alternative measure to the Company’s current lending arrangements.

 

Coverage Ratios

 

The Company presents fixed charge and interest coverage ratios to provide a measure of the Company’s financial flexibility to service current debt amortization, interest expense and ground rent from current cash net operating income.  These coverage ratios are provided on both a consolidated and combined basis.  The combined coverage ratios include the Company’s pro-rata share of off-balance sheet (unconsolidated) joint venture fixed charges and cash net operating income.  These coverage ratios represent a common measure of the Company’s ability to service fixed cash payments; however, these ratios are not used as an alternative to cash flow from operating, financing and investing activities (determined in accordance with GAAP).

 

 

4

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

SL GREEN REALTY CORP.

 

 

 

 

 

 

 

/S/ Thomas E. Wirth

 

 

Thomas E. Wirth

Executive Vice President, Chief Financial Officer

 

 

 

 

 

 

Date:  May 14, 2003

 

 

5

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

420 Lexington Avenue New York City, NY 10170

 

CONTACT

Michael W. Reid

Chief Operating Officer

-or-

Thomas E. Wirth

Chief Financial Officer

(212) 594-2700

 

FOR IMMEDIATE RELEASE

 

SL GREEN REALTY CORP. REPORTS 9% INCREASE

IN FIRST QUARTER FFO PER SHARE

 

First Quarter Highlights

 

•      9% FFO increase, $0.85 per share (diluted) versus $0.78 (diluted) in the prior year

•      Completed acquisitions of The News Building and condominium interests in 125 Broad Street for $357.0 million

•      Sold 50 West 23rd Street for $66.0 million, realizing a gain of $19.2 million

•      Originated $23.0 million of structured finance investments

•      Renewed $300.0 million unsecured revolving credit facility

•      Financed 673 First Avenue with a $35.0 million ten-year fixed rate mortgage at 5.67%

 

Financial Results

 

New York, NY, April 22, 2003 — SL Green Realty Corp. (NYSE:SLG) reported a 9% increase in operating results for the three months ended March 31, 2003.  During this period, funds from operations (FFO) before minority interest totaled $30.2 million, or $0.85 per share diluted, compared to $27.0 million, or $0.78 per share (diluted), for the same quarter in 2002.  This growth was mainly attributable to property acquisitions and increased contributions from the Company’s unconsolidated joint ventures.

 

Net income available for common shareholders for the first quarter 2003 totaled $33.9 million, or $1.01 per share (diluted), an increase of 102% as compared to the same quarter in 2002 when net income totaled $15.2 million, or $0.50 per share (diluted).  The 2003 results include a $0.50 per share gain on sale of 50 West 23rd Street, which had been previously classified as a discontinued

 

 

operation.  Excluding the gain, net income available to common shareholders increased 2% to $0.51 per share.

 

Consolidated Results

 

Total quarterly revenues increased 16% in the first quarter to $68.7 million compared to $59.4 million last year.  The $9.3 million growth in revenue primarily resulted from the following items:

 

•      $5.1 million increase from 2003 acquisitions

•      $3.3 million increase from the 2003 same-store portfolio

•      $0.7 million increase in other income

•      $0.5 million increase in non-same-store revenue

•      $0.7 million decrease in preferred and investment income

 

The Company’s EBITDA increased $3.4 million to $39.3 million; however margins before ground rent decreased to 68.5% compared to 74.0% for the same period last year and after ground rent, margins decreased to 63.4% from 68.0% in the corresponding period.  The reductions in margins are due to higher operating costs, primarily from insurance and seasonal fuel and steam costs, which have lower recovery rates.  The following items primarily drove EBITDA improvement:

 

•      $3.6 million increase from GAAP NOI;

•      $3.0 million increase from 2003 property acquisitions

•      $0.8 million increase in income from unconsolidated joint ventures

•      $0.4 million increase in non-same-store revenue

•      $0.9 million decrease from same-store portfolio

 

FFO improved $3.2 million primarily as a result of:

 

•      $3.4 million increase in EBITDA

•      $1.5 million increase in FFO adjustment from unconsolidated joint ventures

•     $1.2 million decrease from higher interest expense

•                  $0.5 million decrease from increased amortization of finance costs written-off from the renewal of the unsecured line of credit

 

The $1.2 million increase in interest expense was primarily associated with higher average debt levels associated with new investment activity ($1.6 million) and the funding of ongoing capital projects and working capital requirements ($0.1 million).  These increases were partially offset by reduced loan balances due to previous disposition activity ($0.5 million) and lower interest rates ($0.1 million).

 

The 2002 results have been restated to classify the operating results of 50 West 23rd Street and the Shelton, Connecticut property as income from discontinued operations.  The Company has a contract of sale for the Shelton, Connecticut property which is scheduled to close during the second quarter 2003.

 

 

 

Same-Store Results

 

During the first quarter, same-store cash NOI decreased $0.2 million to $27.7 million, as compared to $27.9 million over the same prior year period.  Cash NOI margins before ground rent decreased year over year from 62.3% to 57.0%.  The decrease in cash NOI was driven by a $4.4 million (19%) increase in expenses.  This increase was primarily due to:

 

•      $2.1 million (30%) increase in real estate taxes

•      $1.0 million (110%) increase in steam, heating and fuel costs

•      $0.7 million (267%) increase in insurance costs

•      $0.2 million (5%) increase in repairs, maintenance and cleaning expenses

•      $0.3 million (33%) increase in management, professional and advertising costs

 

The increase in expenses was partially offset by a $4.3 million (8%) increase in cash revenue due to:

 

•                  $2.5 million increase from replacement rents, which were 26% higher than previously fully escalated rents, including early renewals ($1.7 million) and contractual rent steps and reduced free rent ($0.8 million).

•                  $1.0 million increase in escalation and reimbursement revenue primarily due to real estate tax reimbursements ($1.2 million).

•      $0.6 million increase from higher weighted-average occupancy in 2003 (96.8%) compared to 2002 (96.5%).

 

Approximately 93% of the quarterly electric expense was recovered through the utility clause in the tenants’ leases.

 

Leasing Activity

 

For the quarter, the Company signed 57 office leases totaling 316,733 rentable square feet with starting office cash rents averaging $36.87 per square foot, a 4.5% increase over previously escalated cash rents averaging $35.28 per square foot.  Tenant concessions averaged 4.0 months of free rent with an allowance for tenant improvements of $19.62 per rentable square foot.  This leasing activity includes early renewals for five office leases totaling 41,021 rentable square feet.  Including retail and storage, the Company’s quarterly leasing activity totaled 63 signed leases for 331,304  rentable square feet.

 

New Property Activity

 

220 East 42nd Street

 

In February 2003, the Company completed the previously announced acquisition of the 1.1 million square foot office property located at 220 East 42nd Street known as The News Building, a property located in the Grand Central and United Nations marketplace, for a purchase price of $265.0 million.  Prior to the acquisition, the Company held a $53.5 million preferred equity

 

 

investment in the property that was redeemed in full at closing.  In connection with the redemption, the Company earned a redemption premium totaling $4.4 million that is being accounted for as a reduction of basis adjusting the effective purchase price to $260.6 million.  In connection with this acquisition, the Company assumed a $158.0 million mortgage, which matures in September 2004 and bears interest at LIBOR plus 1.76%, and issued approximately 376,000 units of limited partnership interest in the SL Green Operating Partnership having an aggregate value of approximately $11.3 million.  The remaining $42.2 million of the purchase price was funded from borrowings under the Company’s unsecured credit facility.  A portion of which was used to repay, at closing,  a $28.5 million mezzanine loan on the property.

 

125 Broad Street

 

In March 2003, the Company acquired condominium interests in 125 Broad Street for approximately $92.0 million.  The Company assumed the $76.6 million first mortgage currently encumbering this property.  The mortgage matures in October 2007 and bears interest at 8.29%.  In addition, the Company issued 52,000 units of limited partnership interests in the SL Green Operating Partnership having an aggregate value of approximately $1.6 million.  The property is encumbered by a ground lease, which the condominium can acquire in the future at a fixed price.

 

50 West 23rd Street

 

In March 2003 the Company sold 50 West 23rd Street for $66.0 million or approximately $198 per square foot.  The Company acquired the building at the time of its IPO in August of 1997, at a purchase price of approximately $36.6 million.  Since that time, the building was upgraded and repositioned enabling the Company to realize a gain of approximately $19.2 million.  The proceeds of the sale were used to pay off an existing $21.0 million first mortgage and substantially all of the balance was reinvested into the acquisitions of 220 East 42nd Street (The News Building) and 125 Broad Street to effectuate a partial 1031 tax-free exchange.

 

Structured Finance Activity

 

During January 2003, the Company originated a $15.0 million structured finance investment with an initial yield of 12.5%.  Also in January 2003, the Company originated an $8.0 million preferred equity investment with an initial yield of 12.0%.

 

As of March 31, 2003, the par value of the Company’s structured finance and preferred equity investments totaled $114.5 million.  The weighted balance outstanding over the quarter was $125.2 million.  During the first quarter 2003 the weighted average yield was 12.4%.  The quarter end run rate was 12.8%.

 

Financing Activity

Unsecured Line of Credit Renewal

 

In March 2003, the Company renewed its $300.0 million unsecured revolving credit facility with a group of 13 banks led by Fleet National Bank.  The Company has an option to increase the capacity under this credit facility to $375.0 million.  The unsecured revolving credit facility has a term of three years and bears interest at a spread ranging from 130 basis points to 170 basis points over LIBOR, based on the Company’s leverage ratio.  As of the renewal date, the

 

 

Company’s current borrowing rate decreased from 150 basis points over LIBOR to 140 basis points over LIBOR.

 

673 First Avenue Mortgage

 

In February 2003, the Company completed a $35.0 million first mortgage financing of the property located at 673 First Avenue.  The mortgage bears interest at a fixed rate of 5.67% and matures in February 2013.  The financing proceeds were used to reduce the Company’s outstanding balance on the Company’s unsecured line of credit.

 

Other

 

Today, SL Green’s portfolio consists of interests in 26 properties, aggregating 12.9 million square feet.

 

SL Green Realty Corp. is a self-administered and self-managed real estate investment trust (“REIT”) that acquires, owns, repositions and manages a portfolio of commercial office properties in Manhattan.  The Company is the only publicly traded REIT which exclusively specializes in this niche.

 

Financial Tables attached

 

To receive SL Green’s latest news release and other corporate documents, including the First Quarter Supplemental Data, via FAX at no cost, please contact the Investor Relations office at 212-216-1601.  All releases and supplemental data can also be downloaded directly from the SL Green website at:  www.slgreen.com

 

During the April 23, 2003 conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G.  In addition, the Company has used non-GAAP financial measures in this press release.  The GAAP financial measure most directly comparable to each non-GAAP financial measure presented and discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on pages six and eight of this release.

 

Forward-looking Information

 

This press release contains forward-looking information based upon the Company’s current best judgment and expectations.  Actual results could vary from those presented herein.  The risks and uncertainties associated with forward-looking information in this release include the strength of the commercial office real estate markets in New York, competitive market conditions, unanticipated administrative costs, timing of leasing income, general and local economic conditions, interest rates, capital market conditions, tenant bankruptcies and defaults, the availability and cost of comprehensive insurance, including coverage for terrorist acts, and other factors, many of which are beyond the Company’s control.  We undertake no obligation to publicly update or revise any of the forward-looking information.  For further information, please refer to the Company’s filing with the Securities and Exchange Commission.

 

 

SL GREEN REALTY CORP.

STATEMENTS OF OPERATIONS-UNAUDITED

(Amounts in thousands, except per share data)

 

 

 

Three Months Ended

March 31,

 

 

 

2003

 

2002

 

Revenue:

 

 

 

 

 

Rental revenue, net

 

$

53,280

 

$

45,794

 

Escalations & reimbursement revenues

 

8,460

 

6,506

 

Signage rent

 

325

 

466

 

Investment income

 

3,361

 

3,720

 

Preferred equity income

 

1,556

 

1,911

 

Other income

 

1,701

 

975

 

Total revenues

 

68,683

 

59,372

 

Expenses:

 

 

 

 

 

Operating expenses

 

17,094

 

13,323

 

Real estate taxes

 

9,998

 

7,059

 

Ground rent

 

3,164

 

3,159

 

Interest

 

9,652

 

8,418

 

Depreciation and amortization

 

10,883

 

9,267

 

Marketing, general and administrative

 

3,186

 

3,202

 

Total expenses

 

53,977

 

44,428

 

Income from continuing operations before minority interests, preferred stock dividends, gain on sales, affiliates and joint venture

 

14,706

 

14,944

 

Equity in net loss from affiliates

 

(97

)

(84

)

Equity in net income from unconsolidated joint ventures

 

4,176

 

3,333

 

Minority interest in operating partnership

 

(1,132

)

(1,110

)

Income from continuing operations

 

17,653

 

17,083

 

Income from discontinued operations, net of minority interest

 

867

 

553

 

Gain on sale of discontinued operations, net of minority interest

 

17,827

 

—

 

Net income

 

36,347

 

17,636

 

Preferred stock dividends and accretion

 

(2,431

)

(2,423

)

Net income available to common shareholders

 

$

33,916

 

$

15,213

 

Net income per share (Basic)

 

$

1.11

 

$

0.51

 

Net income per share (Diluted)

 

$

1.01

 

$

0.50

 

Funds From Operations (FFO)

 

 

 

 

 

FFO per share (Basic)

 

$

0.92

 

$

0.84

 

FFO per share (Diluted)

 

$

0.85

 

$

0.78

 

FFO Calculation:

 

 

 

 

 

Net income available to common shareholders

 

$

33,916

 

$

15,213

 

Less:

 

 

 

 

 

Gain on sale of discontinued operations

 

(17,827

)

—

 

Amortization of deferred financing costs and depreciation of non-real estate assets

 

(1,484

)

(983

)

Add:

 

 

 

 

 

Joint venture FFO adjustment

 

3,387

 

1,881

 

Depreciation and amortization

 

10,883

 

9,267

 

FFO adjustment from discontinued operations

 

90

 

374

 

Minority interest in operating partnership

 

1,132

 

1,110

 

Preferred stock accretion

 

131

 

123

 

FFO — BASIC

 

$

30,228

 

$

26,985

 

Add:  Preferred stock dividends

 

2,300

 

2,300

 

FFO — DILUTED

 

$

32,528

 

$

29,285

 

Basic ownership interests

 

 

 

 

 

Weighted average REIT common shares

 

30,706

 

29,992

 

Weighted average partnership units held by minority interest

 

2,280

 

2,271

 

Basic weighted average shares and units outstanding

 

32,986

 

32,263

 

Diluted ownership interest

 

 

 

 

 

Weighted average REIT common and common share equivalent shares

 

31,203

 

30,634

 

Weighted average partnership units held by minority interests

 

2,280

 

2,271

 

Common share equivalents for preferred stock

 

4,699

 

4,699

 

Diluted weighted average equivalent shares and units outstanding

 

38,182

 

37,604

 

 

 

SL GREEN REALTY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands)

 

 

 

March 31, 2003

 

December 31,2002

 

Assets

 

(Unaudited)

 

 

 

Commercial real estate properties, at cost:

 

 

 

 

 

Land and land interests

 

$

182,510

 

$

131,078

 

Buildings and improvements

 

981,971

 

683,165

 

Building leasehold

 

150,375

 

149,326

 

Property under capital lease

 

12,208

 

12,208

 

 

 

1,327,064

 

975,777

 

Less accumulated depreciation.

 

(130,675

)

(126,669

)

 

 

1,196,389

 

849,108

 

 

 

 

 

 

 

Assets held for sale.

 

16,226

 

41,536

 

Cash and cash equivalents

 

24,619

 

58,020

 

Restricted cash

 

59,035

 

29,082

 

Tenant and other receivables, net of allowance of $6,090 and $5,927 in 2003 and 2002, respectively

 

8,921

 

6,587

 

Related party receivables.

 

5,213

 

4,868

 

Deferred rents receivable net of allowance of  $6,915 and $6,575 in 2003 and 2002, respectively

 

57,223

 

55,731

 

Investment in and advances to affiliates

 

3,733

 

3,979

 

Structured finance investments, net of discount of $165 and $205 in 2003 and 2002, respectively

 

114,496

 

145,640

 

Investments in unconsolidated joint ventures.

 

213,802

 

214,644

 

Deferred costs, net

 

37,251

 

35,511

 

Other assets.

 

18,911

 

28,464

 

Total assets

 

$

1,755,819

 

$

1,473,170

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Mortgage notes payable.

 

$

621,469

 

$

367,503

 

Revolving credit facilities

 

51,000

 

74,000

 

Unsecured term loan

 

100,000

 

100,000

 

Derivative instruments at fair value

 

11,553

 

10,962

 

Accrued interest payable

 

2,917

 

1,806

 

Accounts payable and accrued expenses

 

36,906

 

41,197

 

Deferred compensation awards

 

—

 

1,329

 

Deferred revenue/gain.

 

27,337

 

3,096

 

Capitalized lease obligations.

 

15,937

 

15,862

 

Deferred land lease payable

 

14,786

 

14,626

 

Dividend and distributions payable.

 

17,859

 

17,436

 

Security deposits

 

20,928

 

20,948

 

Liabilities related to assets held for sale.

 

14,821

 

21,321

 

Total liabilities

 

935,513

 

690,086

 

 

 

 

 

 

 

Minority interests.

 

54,819

 

44,039

 

Minority interest in partially owned assets.

 

490

 

679

 

Commitments and contingencies

 

 

 

 

 

8% Preferred Income Equity Redeemable Shares $0.01 par value, $25.00 mandatory liquidation preference, 4,600 outstanding at March 31, 2003 and December 31, 2002

 

111,852

 

111,721

 

Stockholders’ Equity

 

 

 

 

 

Common stock, $0.01 par value 100,000 shares authorized, 30,939 and 30,422 issued and outstanding at March 31, 2003 and December 31, 2002 respectively 

 

309

 

304

 

Additional paid — in capital

 

603,907

 

592,585

 

Deferred compensation plan

 

(9,224

)

(5,562

)

Accumulated other comprehensive loss

 

(11,375

)

(10,740

)

Retained earnings.

 

69,528

 

50,058

 

Total stockholders’ equity

 

653,145

 

626,645

 

Total liabilities and stockholders’ equity

 

$

1,755,819

 

$

1,473,170

 

 

 

SL GREEN REALTY CORP.

SELECTED OPERATING DATA-UNAUDITED

 

 

 

March 31,

 

 

 

2003

 

2002

 

Operating Data:

 

 

 

 

 

Net rentable area at end of period (in 000’s)(1)

 

12,860

 

10,036

 

Portfolio occupancy percentage at end of period

 

95.5

%

97.0

%

Same Store occupancy percentage at end of period

 

96.8

%

96.6

%

Number of properties in operation

 

26

 

25

 

 

 

 

 

 

 

Office square feet leased during quarter (rentable)

 

316,733

 

168,798

 

Average mark-to-market percentage-office

 

4.3

%

29.7

%

Average starting cash rent per rentable square feet-office

 

$

36.87

 

$

38.42

 

 

(1)   Includes wholly owned and majority and minority owned properties.

 

 

SL GREEN REALTY CORP.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES*

(Amounts in thousands)

 

 

 

Three Months Ended

March 31,

 

 

 

2003

 

2002

 

Net income available to common shareholders:

 

$

33,916

 

$

15,213

 

Add:

 

 

 

 

 

Dividends on preferred shares

 

2,300

 

2,300

 

Preferred stock accretion

 

131

 

123

 

Net income:

 

36,347

 

17,636

 

Add:

 

 

 

 

 

Minority interest

 

1,132

 

1,110

 

Interest expense

 

9,652

 

8,418

 

Depreciation and amortization expense

 

10,883

 

9,267

 

Less:

 

 

 

 

 

Income from discontinued operations

 

867

 

553

 

Gain on sale of discontinued operations

 

17,827

 

—

 

Earnings before interest, depreciation and amortization (EBITDA):

 

39,320

 

35,878

 

Add:

 

 

 

 

 

Marketing, general & administrative expense

 

3,186

 

3,202

 

Operating income from discontinued operations

 

1,705

 

1,798

 

Less:

 

 

 

 

 

Non-building revenue

 

6,326

 

6,586

 

GAAP net operating income (GAAP NOI)

 

$

37,885

 

$

34,292

 

 

 

 

 

 

 

GAAP NOI:

 

$

37,885

 

$

34,292

 

Less:

 

 

 

 

 

GAAP NOI from discontinued operations

 

1,705

 

1,798

 

GAAP NOI from other consolidated properties

 

2,712

 

 

(60

)

Other Non-Same-Store NOI

 

4,138

 

2,324

 

2003 Same-Store GAAP NOI

 

$

29,330

 

$

30,230

 

Less:

 

 

 

 

 

Free-Rent

 

479

 

708

 

Straight-line rent

 

1,329

 

1,762

 

Add:

 

 

 

 

 

Ground lease straight-line rent expense

 

160

 

160

 

2003 Same-Store cash NOI

 

$

27,682

 

$

27,920

 

 

* - See page 6 for a reconciliation of FFO

 

Exhibit 99.2

 

 

SL Green Realty Corp. is a fully integrated, self-administered and self-managed Real Estate Investment Trust (REIT) that primarily owns, manages, leases, acquires and repositions office properties in emerging, high-growth submarkets of Manhattan.

 

•      SL Green’s common stock and Preferred Income Equity Redeemable Shares (“PIERS” SM), are listed on the New York Stock Exchange, and trade under the symbols: SLG and SLG PrA respectively.

•      SL Green maintains an internet site at www.slgreen.com at which most key investor relations data pertaining to dividend declaration, payout, current and historic share price, etc. can be found.  Such information is not reiterated in this supplemental financial package.  This supplemental financial package is available through the Company’s Internet site.

•      This data is presented to supplement audited and unaudited regulatory filings of the Company and should be read in conjunction with those filings.  The financial data herein is unaudited and is provided from the prospective of timeliness to assist readers of quarterly and annual financial filings.  As such, data otherwise contained in future regulatory filings covering the same period may be restated from the data presented herein.

 

Questions pertaining to the information contained herein should be referred to Michael W. Reid or Thomas E. Wirth at michael.reid@slgreen.com or tom.wirth@slgreen.com or at 212-594-2700.

 

This report includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, included in this report that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), expansion and other development trends of the real estate industry, business strategies, expansion and growth of the Company’s operations and other such matters are forward-looking statements.  These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate.  Such statements are subject to a number of assumptions, risks and uncertainties, general economic and business conditions, the business opportunities that may be presented to and pursued by the Company, changes in laws or regulations and other factors, many of which are beyond the control of the Company.  Any such statements are not guarantees of future performance and actual results or developments may differ materially from those anticipated in the forward-looking statements.

 

The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statements for the three months ended March 31, 2003 that will subsequently be released on Form 10-Q to be filed on or before May 15, 2003.

 

2

 

TABLE OF CONTENTS

 

Highlights of Current Period Financial Performance

 

 

 

Unaudited Financial Statements

 

Corporate Profile

 

Financial Highlights

 

Balance Sheets

 

Statements of Operations

 

Joint Venture Statements

 

Statement of Stockholders’ Equity

 

Funds From Operations

 

 

 

Selected Financial Data

 

 

 

Summary of Debt and Ground Lease Arrangements

 

 

 

Mortgage Investments and Preferred Equity

 

 

 

Property Data

 

Composition of Property Portfolio

 

Top Tenants

 

Leasing Activity Summary

 

Lease Expiration Schedule

 

 

 

Summary of Acquisition/Disposition Activity

 

Supplemental Definitions

 

Corporate Information

 

 

3

 

CORPORATE PROFILE

 

SL Green Realty Corp. (the “Company”) was formed on August 20, 1997 to continue the commercial real estate business of S.L. Green Properties Inc. founded in 1980 by Stephen L. Green, our current Chairman and Chief Executive Officer. For more than 20 years SL Green has been engaged in the business of owning, managing, leasing, acquiring and repositioning office properties in Manhattan.  The Company’s investment focus is to create value through the acquisition, redevelopment and repositioning of Manhattan office properties and releasing and managing these properties for maximum cash flow.

 

Looking forward, SL Green Realty Corp. will continue its opportunistic investment philosophy through three established business lines:  investment in long term core properties, investment in opportunistic assets and structured finance investments.  This three-legged investment strategy will allow SL Green to balance the components of its portfolio to take advantage of each stage in the business cycle.

 

Today, the Company is the only fully integrated, self-managed, self-administered Real Estate Investment Trust (REIT) exclusively focused on owning and operating office buildings in Manhattan. SL Green is a pure play for investors to own a piece of New York.

 

4

 

FINANCIAL HIGHLIGHTS

 

FIRST QUARTER 2003

UNAUDITED

 

FINANCIAL RESULTS

 

Funds From Operations (FFO) before minority interest for the first quarter 2003 totaled $30.2 million, or $0.85 per share (diluted), a 9% increase compared to the same quarter in 2002 when FFO totaled $27.0 million, or $0.78 per share (diluted).

 

Net income available for common shareholders for the first quarter 2003 totaled $33.9 million, or $1.01 per share (diluted), an increase of 102% as compared to the same quarter in 2002 when net income totaled $15.2 million, or $0.50 per share (diluted).  The 2003 results include $0.50 per share gain on sale of 50 West 23rd Street, which had been previously classified as a discontinued operation.  Excluding the gain, net income would have totaled $16.1 million, or $0.51 per share, a 2% increase over the prior year.

 

Funds available for distribution (FAD) for the first quarter 2003 increased to $0.68 per share (diluted) versus $0.62 per share (diluted) in the prior year, a 10% increase.

 

The Company’s dividend payout ratio was 54.3% of FFO and 67.6% of FAD before first cycle leasing costs.

 

CONSOLIDATED RESULTS

 

Total quarterly revenues increased 16% in the first quarter to $68.7 million compared to $59.4 million last year.  The $9.3 million growth in revenue resulted from the following items:

 

•      $5.1 million increase from 2003 acquisitions

•      $3.3 million increase from the 2003 same-store portfolio

•      $0.7 million increase in other income

•      $0.5 million increase in non-same-store revenue

•      $0.7 million decrease in preferred equity and investment income

 

The Company’s EBITDA increased $3.4 million to $39.3 million, however margins before ground rent decreased to 68.5% compared to 74.0% for the same period last year.  The decrease in margins is due to increased operating costs, primarily insurance and seasonal fuel and steam costs that have low recovery rates.  After ground rent, margins decreased in 2003 to 63.4% from 68.0% in the corresponding period 2002.  The following items drove EBITDA improvements:

 

(1)   Consolidated GAAP NOI increased $3.6 million:

 

•      $3.0 million increase from 2003 property acquisitions of 220 East 42nd Street (February 2003) and 125 Broad Street (March 2003).

 

•      $0.8 million increase from the equity in income from unconsolidated joint ventures (primarily due to the acquisition of 1515 Broadway (May 2002)).

 

•      $0.4 million increase from non same-store property results, inclusive of 50 West 23rd Street and Shelton, Connecticut properties.

 

5

 

•      $0.9 million decrease from the 2003 same-store properties mainly due to $4.4 million of increased operating costs resulting from (i) increased real estate taxes ($2.1 million) due to higher assessed values and tax rates, (ii) increased insurance costs ($0.7 million) due to higher premiums on the annual policy which commenced October 2002, and (iii) increased fuel and steam expense due to higher oil prices and colder winter temperatures through 2003 ($1.0 million).

 

The increased operating costs were partially offset by a $3.5 million increase in GAAP revenues from (i) rental revenue increases of $1.9 million as GAAP replacement rents were 31% higher than previous fully-escalated rents,  (ii) higher reimbursement revenues ($1.0 million) largely due to higher real estate tax escalation income ($1.2 million) partially off-set by a reduction in other escalations, and (iii) $0.6 million increase from higher weighted-average occupancy in 2003 (96.8%) compared to 2002 (96.5%).

 

(2)   $0.7 million decrease in investment and preferred equity income primarily due to an decrease in the weighted-average asset balance from $188.6 million to $125.2 million.  The weighted average yield decreased from 12.63% to 12.38% due mainly to lower LIBOR.

 

(3)   $0.7 million increase in other income primarily due to asset management fees earned on joint ventures ($0.4 million) and a gain on sale of mortgage recording tax credits ($0.3 million).

 

FFO improved $3.2 million primarily as a result of:

 

•      $3.4 million increase in EBITDA.

•      $1.5 million increase in FFO adjustment from unconsolidated joint ventures.

•      $1.2 million decrease from higher interest expense.

•      $0.5 million decrease from increase amortization of finance costs from the early refinancing of the Company’s unsecured revolving line of credit.

 

The $1.2 million increase in interest expense was primarily due to higher average debt levels associated with new investment activity ($1.6 million) and the funding of ongoing capital projects and working capital requirements ($0.1 million).  These increases were partially offset by reduced loan balances due to previous disposition activity ($0.5 million) and lower interest rates ($0.1 million).

 

SAME-STORE RESULTS

 

Same-store cash NOI decreased $0.2 million to $27.7 million in 2003 due to a $4.4 million increase in operating costs, partially offset by a $4.3 million increase in cash revenue.  Cash operating margins before ground rent decreased from 57.7% to 53.8%.

 

6

 

GAAP NOI decreased by $1.0 million over the prior year, and GAAP operating margins before ground rent decreased from 62.3% to 57.0%.

 

 

The $4.4 million increase in same-store operating expenses resulted from:

 

1.     $2.1 million (30%) increase in real estate taxes due to higher property value assessments and an increase to the tax rate.

 

2.     $1.0 million (110%) increase in steam and heating fuel costs primarily due to the colder temperatures and higher oil prices.

 

3.     $0.7 million (267%) increase in insurance costs due to higher premiums from the Company’s insurance policy that was renewed in October 2002.

 

4.     $0.2 million (5%) increase in repairs, maintenance and cleaning expenses (inserted bullet from press release)

 

5.     $0.3 million (33%) increase in management, professional and advertising costs.

 

The $4.3 million increase in cash revenue was due to:

 

1.     $2.5 million increase in cash rental revenue due to (i) a $1.7 million increase resulting from higher replacement rents including early renewals on approximately 59,000 rentable square feet that were 26% greater than previously fully escalated rents and (ii) $0.8 million from increased cash revenue from rent-steps and reduced free rent.

 

2.     $1.0 million increase in escalation and reimbursement income due to the higher escalation revenue from real estate taxes.

 

3.     $0.6 million from higher weighted-average occupancy in 2003 (96.8%) compared to 2002 (96.5%).

 

The electric recovery rate for the quarter was approximately 93%.

 

QUARTERLY LEASING HIGHLIGHTS

 

Vacancy at December 31, 2002 was 358,910 useable square feet net of holdover tenants.  During the quarter, the Company sold 50 West 23rd Street, reducing vacancy by 9,467 useable square feet and acquired 220 East 42nd Street and 125 Broad Street, increasing vacancy by 97,309 useable square feet.  During the quarter, 368,221 additional useable office square feet became available at an average escalated cash rent of $40.71 per rentable square foot.  Space available before holdovers to lease during the quarter totaled 814,961 useable square feet, or 6.3% of the total portfolio.

 

7

 

During the first quarter,  55 leases were signed totaling 215,195 useable square feet.  New cash rents averaged $37.65 per rentable square foot.  Replacement rents were 3.5% greater than rents on previously occupied space, which had fully escalated cash rents averaging $36.39 per rentable square foot.  The average lease term was 6.8 years and average tenant concessions were 4.0 months of free rent with an allowance of $20.96 per rentable square foot.  Including early renewals and excluding holdover tenants, the tenant renewal rate was 13.1% based on square feet expiring.  The renewal rate increases to 38% inclusive of the sub-tenants at One Park Avenue that became direct tenants.  Seventeen leases have expired comprising 24,313 useable square feet that are in a holdover status.  This results in 575,453 useable square feet (net of holdovers) remaining available as of March 31, 2003.

 

The overall average lease term on the quarterly leasing activity was 6.2 years.

 

The Company signed 5 office leases for 28,811 useable square feet that were for early renewals.  The early renewals for space were not scheduled to become available until after the first quarter of 2004.  The Company was able to renew current office tenants at an average cash rent of $29.70 per rentable square foot, representing an increase of 15.7% over the previously fully escalated rents of $25.67.  The average lease term on the office early renewals was 4.4 years.

 

PROPERTY ACTIVITY

 

220 East 42nd Street

 

In February 2003, the Company completed the previously announced acquisition of the 1.1 million square foot office property located at 220 East 42nd Street known as The News Building, a property located in the Grand Central and United Nations marketplace, for a purchase price of $265.0 million.     Prior to the acquisition, the Company held a $53.5 million preferred equity investment in the property which was paid in full at closing.  In connection with the redemption of the Company’s preferred equity investment, the Company earned a premium totaling $4.4 million that is being accounted for as a reduction in basis adjusting the effective purchase price to $260.6 million.    In connection with this acquisition, the Company assumed a $158.0 million mortgage, which matures in September 2004 and bears interest at LIBOR plus 1.76%, and issued approximately 376,000 units of limited partnership interest in the SL Green Operating Partnership, having an aggregate value of approximately $11.3 million.  In addition, the Company’s $53.5 million preferred equity investment in The News Building was redeemed in full.  The remaining $42.2 million of the purchase price was funded from borrowings under the Company’s unsecured credit facility.  This included the repayment of a $28.5 million mezzanine loan on the property.

 

8

 

125 Broad Street

 

In March 2003, the Company acquired condominium interests in 125 Broad Street for approximately $92.0 million.  The Company assumed the $76.6 million first mortgage currently encumbering this property.  The mortgage matures in October 2007 and bears interest at 8.29%.  In addition, the Company issued 52,000 units of limited partnership interests in the SL Green Operating Partnership, having an aggregate value of approximately $1.6 million.  The property is encumbered by a ground lease that expires in 2067 that the company can acquire in the future at a fixed price.

 

50 West 23rd Street

 

In March 2003 the Company sold 50 West 23rd Street for $66.0 million or approximately $198 per square foot.  The Company acquired the building at the time of its IPO in August of 1997, at a purchase price of approximately $36.6 million.  Since that time the building was upgraded and repositioned, enabling the Company to realize a gain of approximately $19.2 million.  The proceeds of the sale were used to pay off an existing $21.0 million first mortgage and substantially all of the balance was reinvested into the acquisitions of 220 East 42nd Street (The News Building) and 125 Broad Street to effectuate a partial 1031 tax-free exchange.

 

OTHER ACTIVITY

 

Structured Finance Activity

 

During January 2003, the Company originated a $15.0 million structured finance investment with an initial yield of 12.5%.  Also in January 2003, the Company originated an $8.0 million preferred equity investment with an initial yield of 12.0%.

 

As of March 31, 2003 the par value of the Company’s structured finance and preferred equity investments totaled $114.5 million.  The weighted balance outstanding over the quarter was $125.2 million.  During the first quarter 2003 the weighted average yield was 12.4%.  The quarter end run rate was 12.8%.

 

673 First Avenue Mortgage

 

In February 2003 the Company completed a $35.0 million first mortgage financing of the property located at 673 First Avenue.  The mortgage bears interest at 5.67% and matures in February 2013.  The proceeds were used to pay down the outstanding balance on the Company’s unsecured line of credit.

 

Line of Credit Renewal

 

In March 2003, the Company renewed its $300.0 million unsecured revolving credit facility with a group of 13 banks led by Fleet National Bank.  The Company has an option to

 

9

 

increase the capacity under this credit facility to $375.0 million.  The unsecured revolving credit facility has a term of three years and bears interest at a spread ranging from 130 basis points to 170 basis points over LIBOR, based on the Company’s leverage ratio.  As of the refinancing date, the Company’s current borrowing rate decreased from 150 basis points over LIBOR to 140 basis points over LIBOR.

 

COMMON AND PREFERRED DIVIDENDS

 

On March 15, 2003 the Company declared a dividend of $0.465 per common share for the quarter ended March 31, 2003.  This dividend reflects the regular quarterly dividend, which is the equivalent of an annualized dividend of $1.86 per common share.

The Company also declared a dividend of $0.50 per share of Preferred Income Equity Redeemable Stock for shareholders of record as of March 31, 2003.  Both dividends were paid on April 15, 2003.

 

OTHER

 

Annually, the Company adjusts the same-store pool to include all properties owned for a minimum of twelve months (since January 1, 2002).  The 2003 same-store pool includes the following wholly-owned properties:

 

 

2003 SAME-STORE

 

673 First Avenue

 

1140 Avenue of the Americas

 

420 Lexington Avenue

470 Park Avenue South

 

1466 Broadway

 

70 West 36th Street

555 West 57th Street

 

440 Ninth Avenue

 

1414 Avenue of the Americas

711 Third Avenue

 

1372 Broadway

 

292 Madison Avenue

286 Madison Avenue

 

290 Madison Avenue

 

17 Battery Place North

1370 Broadway

 

110 East 42nd Street

 

317 Madison Avenue

 

10

 

FINANCIAL HIGHLIGHTS

 

First Quarter

Unaudited

 

 

 

March 31,

 

 

 

2003

 

2002

 

Operational Information

 

Total Revenues ($000's)

 

$

68,683

 

$

59,372

 

 

 

 

 

 

 

Funds from Operations

 

 

 

 

 

FFO per share- diluted

 

$

0.85

 

$

0.78

 

FFO Payout

 

54.29

%

56.82

%

 

 

 

 

 

 

Funds Available for Distribution

 

 

 

 

 

FAD per share- diluted

 

$

0.68

 

$

0.62

 

FAD Payout

 

67.63

%

71.84

%

 

 

 

 

 

 

Net Income from Continuing Operations - Diluted

 

$

0.49

 

$

0.48

 

Net Income to Common Shareholders - Diluted

 

$

1.01

 

$

0.50

 

 

 

 

 

 

 

Dividends per share

 

$

0.465

 

$

0.443

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Diluted

 

38,182

 

32,905

 

 

 

 

 

 

 

Same-Store Cash NOI

 

$

27,682

 

$

27,920

 

 

 

 

 

 

 

Equity Capitalization Data

 

$

1,018,972

 

$

1,085,745

 

Total Assets

 

$

1,755,819

 

$

1,367,985

 

 

 

 

 

 

 

Total Consolidated Debt

 

$

787,290

 

$

460,186

 

Minority Interest

 

$

55,309

 

$

47,295

 

Preferred Stock

 

$

111,852

 

$

111,353

 

 

 

 

 

 

 

Quarter End Closing Price - SLG Common Stock

 

$

30.56

 

$

33.60

 

Total Market Capitalization

 

$

2,317,455

 

$

1,920,995

 

 

 

 

 

 

 

Ratios

 

Consolidated Debt to Total Market Capitalization

 

40.98

%

29.20

%

Combined  Debt Allocated

 

51.07

%

37.49

%

 

 

 

 

 

 

Consolidated Fixed Charge

 

2.64

 

2.47

 

Combined Fixed Charge

 

2.41

 

2.29

 

 

 

 

 

 

 

Portfolio

 

Total Buildings

 

 

 

 

 

Directly Owned

 

20

 

19

 

Joint Ventures

 

6

 

6

 

 

 

26

 

25

 

 

 

 

 

 

 

Total  SF

 

12,860,000

 

10,036,000

 

End of Quarter Occupancy - Total

 

95.5

%

97.0

%

End of Quarter Occupancy - 2003 Same Store

 

96.8

%

96.5

%

 

11

 

COMPARATIVE BALANCE SHEETS

 

Unaudited

(000's omitted)

 

 

 

3/31/2003

 

3/31/2002

 

+/-

 

12/31/2002

 

+/-

 

9/30/2002

 

+/-

 

Assets

 

Commercial real estate properties, at cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land & land interests

 

182,510

 

138,337

 

44,173

 

131,078

 

51,432

 

131,078

 

51,432

 

Buildings & improvements fee interest

 

981,971

 

699,610

 

282,361

 

683,165

 

298,806

 

675,499

 

306,472

 

Buildings & improvements leasehold

 

150,375

 

145,012

 

5,363

 

149,326

 

1,049

 

147,911

 

2,464

 

Buildings & improvements under capital lease

 

12,208

 

12,208

 

-

 

12,208

 

-

 

12,208

 

-

 

 

 

1,327,064

 

995,167

 

331,897

 

975,777

 

351,287

 

966,696

 

360,368

 

Less accumulated depreciation

 

(130,675

)

(108,034

)

(22,641

)

(126,669

)

(4,006

)

(119,056

)

(11,619

)

 

 

1,196,389

 

887,133

 

309,256

 

849,108

 

347,281

 

847,640

 

348,749

 

Other Real Estate Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in unconsolidated joint ventures

 

213,802

 

124,958

 

88,844

 

214,644

 

(842

)

217,108

 

(3,306

)

Mortgage loans receivable

 

93,145

 

127,669

 

(34,524

)

78,245

 

14,900

 

127,293

 

(34,148

)

Preferred equity investments

 

21,351

 

61,451

 

(40,100

)

67,395

 

(46,044

)

67,416

 

(46,065

)

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Assets held for sale

 

16,226

 

-

 

16,226

 

41,536

 

(25,310

)

41,185

 

(24,959

)

Cash and cash equivalents

 

24,619

 

12,429

 

12,190

 

58,020

 

(33,401

)

13,450

 

11,169

 

Restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant security

 

20,709

 

18,714

 

1,995

 

20,656

 

53

 

19,115

 

1,594

 

Escrows & other

 

38,326

 

18,412

 

19,914

 

8,426

 

29,900

 

13,423

 

24,903

 

Tenant and other receivables, net of $6,089 reserve at 3/31/03

 

8,921

 

7,754

 

1,167

 

6,587

 

2,334

 

8,066

 

855

 

Related party receivables

 

5,213

 

3,417

 

1,796

 

4,868

 

345

 

4,832

 

381

 

Deferred rents receivable, net of reserve for tenant credit loss of $6,915 at 3/31/03

 

57,223

 

53,816

 

3,407

 

55,731

 

1,492

 

54,992

 

2,231

 

Investment in and advances to affiliates

 

3,733

 

2,811

 

922

 

3,979

 

(246

)

3,146

 

587

 

Deferred costs, net

 

37,251

 

34,416

 

2,835

 

35,511

 

1,740

 

34,957

 

2,294

 

Other assets

 

18,911

 

15,005

 

3,906

 

28,464

 

(9,553

)

14,569

 

4,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

1,755,819

 

1,367,985

 

387,834

 

1,473,170

 

282,649

 

1,467,192

 

288,627

 

 

12

COMPARATIVE BALANCE SHEETS

 

Unaudited

(000's omitted)

 

 

 

 

3/31/2003

 

3/31/2002

 

+/-

 

12/31/2002

 

+/-

 

9/30/2002

 

+/-

 

Liabilities and Stockholders’ Equity

 

Mortgage notes payable

 

621,469

 

408,186

 

213,283

 

367,503

 

253,966

 

374,800

 

246,669

 

Unsecured term loan

 

100,000

 

-

 

100,000

 

100,000

 

-

 

-

 

100,000

 

Revolving credit facilities

 

51,000

 

86,931

 

(35,931

)

74,000

 

(23,000

)

173,931

 

(122,931

)

Derivative Instruments-fair value

 

11,553

 

2,002

 

9,551

 

10,962

 

591

 

8,540

 

3,013

 

Accrued interest payable

 

2,917

 

1,617

 

1,300

 

1,806

 

1,111

 

1,945

 

972

 

Accounts payable and accrued expenses

 

36,906

 

24,386

 

12,520

 

41,197

 

(4,291

)

33,935

 

2,971

 

Deferred compensation awards

 

-

 

671

 

(671

)

1,329

 

(1,329

)

671

 

(671

)

Deferred revenue

 

27,337

 

1,676

 

25,661

 

3,096

 

24,241

 

3,777

 

23,560

 

Capitalized lease obligations

 

15,937

 

15,644

 

293

 

15,862

 

75

 

15,895

 

42

 

Deferred land lease payable

 

14,786

 

14,246

 

540

 

14,626

 

160

 

14,466

 

320

 

Dividend and distributions payable

 

17,859

 

16,596

 

1,263

 

17,436

 

423

 

16,693

 

1,166

 

Liabilities related to assets held for sale

 

14,821

 

-

 

14,821

 

21,321

 

(6,500

)

21,414

 

(6,593

)

Security deposits

 

20,928

 

19,019

 

1,909

 

20,948

 

(20

)

19,420

 

1,508

 

Total Liabilities

 

935,513

 

590,974

 

344,539

 

690,086

 

245,427

 

685,487

 

250,026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest (2,404 units outstanding) at 3/31/03

 

55,309

 

47,295

 

8,014

 

44,718

 

10,591

 

44,941

 

10,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Preferred Income Equity Redeemable Shares $0.01 par value, $25.00 mandatory liquidation preference, 4,600 outstanding

 

111,852

 

111,353

 

499

 

111,721

 

131

 

111,599

 

253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

Common stock, $.01 par value 100,000 shares authorized, 30,939 issued and outstanding at 3/31/03

 

309

 

301

 

8

 

304

 

5

 

303

 

6

 

Additional paid – in capital

 

603,907

 

585,509

 

18,398

 

592,585

 

11,322

 

591,668

 

12,239

 

Deferred compensation plans & officer loans

 

(9,224

)

(7,336

)

(1,888

)

(5,562

)

(3,662

)

(5,987

)

(3,237

)

Accumulated other comprehensive loss

 

(11,375

)

(1,709

)

(9,666

)

(10,740

)

(635

)

(8,279

)

(3,096

)

Retained earnings

 

69,528

 

41,598

 

27,930

 

50,058

 

19,469

 

47,460

 

22,068

 

Total Stockholders’ Equity

 

653,145

 

618,363

 

34,782

 

626,645

 

26,500

 

625,165

 

27,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

1,755,819

 

1,367,985

 

387,834

 

1,473,170

 

282,649

 

1,467,192

 

288,627

 

 

13

 

COMPARATIVE STATEMENTS OF OPERATIONS

 

Unaudited

($000's omitted)

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

 

Mar-03

 

Mar-02

 

+/-

 

%

 

Dec-02

 

%

 

Sep-02

 

%

 

Revenues

 

Rental revenue, net

 

51,621

 

43,805

 

7,816

 

18

%

46,791

 

10

%

45,704

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free rent

 

1,385

 

1,536

 

(151

)

-10

%

853

 

62

%

1,483

 

-7

%

Amortization of free rent

 

(758

)

(828

)

70

 

-8

%

(1,118

)

-32

%

(793

)

-4

%

Net free rent

 

627

 

708

 

(81

)

-11

%

(265

)

-337

%

690

 

-9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rent

 

1,460

 

1,794

 

(334

)

-19

%

1,191

 

23

%

1,473

 

-1

%

Allowance for S/L tenant credit loss

 

(428

)

(513

)

85

 

-17

%

(634

)

-33

%

(974

)

-56

%

Escalation and reimbursement revenues

 

8,460

 

6,506

 

1,954

 

30

%

6,694

 

26

%

8,824

 

-4

%

Signage rent

 

325

 

466

 

(141

)

-30

%

564

 

-42

%

191

 

70

%

Preferred equity investment income

 

1,556

 

1,911

 

(355

)

-19

%

1,975

 

-21

%

1,960

 

-21

%

Investment income

 

3,361

 

3,720

 

(359

)

-10

%

3,977

 

-15

%

3,871

 

-13

%

Other income

 

1,701

 

975

 

727

 

75

%

2,305

 

-26

%

1,095

 

55

%

Total Revenues, net

 

68,683

 

59,372

 

9,311

 

16

%

62,597

 

10

%

62,835

 

9

%

Equity in income/(loss) from affiliates

 

(97

)

(84

)

(13

)

15

%

47

 

-306

%

21

 

-561

%

Equity in income from unconsolidated joint ventures

 

4,176

 

3,333

 

843

 

25

%

5,270

 

-21

%

5,784

 

-28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

17,094

 

13,323

 

3,771

 

28

%

14,523

 

18

%

15,990

 

7

%

Ground rent

 

3,164

 

3,159

 

5

 

0

%

3,159

 

0

%

3,159

 

0

%

Real estate taxes

 

9,998

 

7,059

 

2,939

 

42

%

7,653

 

31

%

7,688

 

30

%

Marketing, general and administrative

 

3,186

 

3,202

 

(16

)

0

%

3,563

 

-11

%

3,160

 

1

%

Total Operating Expenses

 

33,442

 

26,743

 

6,699

 

25

%

28,898

 

16

%

29,997

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

39,320

 

35,878

 

3,442

 

10

%

39,016

 

1

%

38,643

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

9,652

 

8,418

 

1,234

 

15

%

9,112

 

6

%

9,069

 

6

%

Depreciation and amortization

 

10,883

 

9,267

 

1,616

 

17

%

10,330

 

5

%

9,711

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Minority Interest and Items

 

18,785

 

18,193

 

592

 

3

%

19,574

 

-4

%

19,863

 

-5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Discontinued Operations

 

867

 

553

 

314

 

57

%

758

 

14

%

744

 

17

%

Gain on sale of Discontinued Operations

 

17,827

 

-

 

17,827

 

0

%

-

 

0

%

-

 

0

%

Minority interest  - OP

 

(1,132

)

(1,110

)

(22

)

2

%

(1,166

)

-3

%

(1,171

)

-3

%

Net Income

 

36,347

 

17,636

 

18,710

 

106

%

19,166

 

90

%

19,436

 

87

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on preferred shares

 

2,300

 

2,300

 

(0

)

0

%

2,300

 

0

%

2,300

 

0

%

Preferred stock accretion

 

131

 

123

 

8

 

7

%

123

 

7

%

123

 

7

%

Net Income Available For Common Shares Holders

 

33,916

 

15,213

 

18,703

 

123

%

16,743

 

103

%

17,013

 

99

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios

 

MG&A to Real Estate Revenue, net

 

5.13

%

6.07

%

 

 

 

 

6.56

%

 

 

5.65

%

 

 

MG&A to Total Revenue, net

 

4.64

%

5.39

%

 

 

 

 

5.69

%

 

 

5.03

%

 

 

Operating Expense to Real Estate Revenue, net

 

27.54

%

25.25

%

 

 

 

 

26.73

%

 

 

28.60

%

 

 

EBITDA to Real Estate Revenue, net

 

63.35

%

67.99

%

 

 

 

 

71.80

%

 

 

69.12

%

 

 

EBITDA before Ground Rent to Real Estate Revenue, net

 

68.45

%

73.98

%

 

 

 

 

77.61

%

 

 

74.77

%

 

 

 

14

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

 

Mar-03

 

Mar-02

 

+/-

 

%

 

Dec-02

 

%

 

Sep-02

 

%

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share (basic)

 

1.11

 

0.51

 

0.60

 

118

%

0.55

 

102

%

0.56

 

98

%

Net income per share (diluted)

 

1.01

 

0.50

 

0.51

 

102

%

0.54

 

87

%

0.54

 

87

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available For Common Shares Holders

 

33,916

 

15,213

 

18,703

 

123

%

16,743

 

103

%

17,013

 

99

%

Book/Tax Depreciation Adjustment

 

2,546

 

1,803

 

743

 

41

%

2,349

 

8

%

2,045

 

24

%

Book/Tax Gain Recognition Adjustment

 

(12,827

)

-

 

(12,827

)

0

%

0

 

0

%

0

 

0

%

Other Operating Adjustments

 

(4,100

)

(3,572

)

(528

)

15

%

(1,058

)

288

%

(1,736

)

136

%

C-corp Earnings

 

97

 

85

 

12

 

14

%

(49

)

-298

%

(21

)

-562

%

Taxable Income

 

19,632

 

13,529

 

6,103

 

45

%

17,985

 

9

%

17,301

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend per share

 

0.465

 

0.4425

 

0.02

 

5

%

0.465

 

0

%

0.4425

 

5

%

Estimated payout of taxable income

 

84

%

98

%

(0.14

)

-14

%

91

%

91

%

-8

%

 

 

Basic weighted average common shares

 

30,706

 

29,992

 

714

 

2

%

30,236

 

2

%

30,357

 

1

%

Diluted weighted average common shares and common share equivalents outstanding

 

38,182

 

32,905

 

5,277

 

16

%

37,764

 

1

%

37,811

 

1

%

 

Payout of Taxable Income Analysis:

Estimated taxable income is derived from net income less straightline rent, free rent net of amortization of free rent, plus tax gain on sale of properties, credit loss, straightline ground rent and the difference between tax and GAAP depreciation.  The Company has deferred the taxable gain on the sales  29 West 35th Street, 17 Battery Place South, 90 Broad Street, 50 West 23rd Street, and 1412 Broadway through 1031 exchanges.

 

15

 

JOINT VENTURE STATEMENTS

 

Balance sheet for unconsolidated joint ventures

Unaudited

(000's omitted)

 

 

 

March 31, 2003

 

 

 

March 31, 2002

 

 

 

Total Property

 

SLG Property Interest

 

 

 

Total Property

 

SLG Property Interest

 

Land & land interests

 

219,993

 

117,455

 

 

 

129,471

 

65,858

 

Buildings & improvements

 

924,818

 

495,038

 

 

 

547,525

 

278,197

 

 

 

1,144,811

 

612,493

 

 

 

676,996

 

344,055

 

Less accumulated depreciation

 

(35,892

)

(18,536

)

 

 

(22,668

)

(11,480

)

 

 

 

 

 

 

 

 

 

 

 

 

Net Real Estate

 

1,108,919

 

593,957

 

 

 

654,328

 

332,575

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

33,316

 

17,334

 

 

 

19,678

 

9,747

 

Restricted cash

 

32,330

 

17,377

 

 

 

19,122

 

9,880

 

Tenant receivables, net of $404 reserve

 

6,057

 

3,280

 

 

 

2,045

 

1,072

 

Deferred rents receivable, net of reserve for tenant credit loss of $80 at 3/31/03

 

16,118

 

8,418

 

 

 

8,358

 

4,200

 

Deferred costs, net

 

13,200

 

7,072

 

 

 

9,731

 

4,917

 

Other assets

 

1,101

 

632

 

 

 

4,008

 

2,005

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

1,211,041

 

648,070

 

 

 

717,270

 

364,396

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan payable

 

742,283

 

396,192

 

references pages 20 & 23

 

444,469

 

225,133

 

Derivative Instruments-fair value (1)

 

(7

)

(4

)

 

 

(549

)

(302

)

Accrued interest payable

 

2,166

 

1,124

 

 

 

1,767

 

878

 

Accounts payable and accrued expenses

 

38,793

 

22,680

 

 

 

11,106

 

5,756

 

Security deposits

 

5,438

 

2,744

 

 

 

5,718

 

2,769

 

Contributed Capital

 

422,368

 

225,334

 

references page 12

 

254,759

 

130,161

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Equity

 

1,211,041

 

648,070

 

 

 

717,270

 

364,396

 

 

As of  March 31, 2003 the Company has six joint venture interests representing a 50% interest in 180 Madison Avenue acquired in December 2000, a 55% interest in1250 Broadway acquired in September 2001, a 50% interest in 100 Park Avenue acquired in February 2000, a 35% interest in 321 West 44th Street contributed May 2000,  a 55% interest in 1 Park Avenue contributed in June 2001, and a 55% interest in 1515 Broadway acquired in May 2002.  These interests are accounted for on the equity method of accounting and, therefore, are not consolidated into the company's financial statements.  Additional detail is available on page 32.

 

(1)   This analysis includes hedge instruments at fair value of $306K on 1250 Broadway and $235K on 1515  Broadway.

 

16

 

JOINT VENTURE STATEMENTS

 

Statements of operations for unconsolidated joint ventures

Unaudited

(000's omitted)

 

 

 

Three Months Ended March 31, 2003

 

Three Months Ended March 31, 2002

 

 

 

 

 

SLG

 

SLG

 

 

 

SLG

 

SLG

 

 

 

Total Property

 

Property Interest

 

Subsidiary

 

Total Property

 

Property Interest

 

Subsidiary

 

Revenues

 

Rental Revenue, net

 

32,819

 

17,406

 

 

 

22,053

 

11,223

 

 

 

Free rent

 

1,352

 

733

 

 

 

689

 

358

 

 

 

Amortization of free rent

 

(265

)

(136

)

 

 

(113

)

(56

)

 

 

Net free rent

 

1,087

 

597

 

 

 

575

 

302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rent

 

1,947

 

1,039

 

 

 

1,074

 

545

 

 

 

Allowance for S/L tenant credit loss

 

(307

)

(164

)

 

 

(262

)

(135

)

 

 

Escalation and reimbursement revenues

 

8,576

 

4,559

 

 

 

4,509

 

2,302

 

 

 

Investment income

 

128

 

69

 

 

 

116

 

58

 

 

 

Other income

 

110

 

60

 

 

 

229

 

119

 

 

 

Total Revenues, net

 

44,360

 

23,567

 

 

 

28,295

 

14,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

Operating expenses

 

12,156

 

6,471

 

 

 

7,126

 

3,605

 

 

 

Real estate taxes

 

8,186

 

4,345

 

 

 

4,253

 

2,161

 

 

 

Total Operating Expenses

 

20,342

 

10,816

 

 

 

11,379

 

5,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP NOI

 

24,325

 

12,915

 

 

 

17,177

 

8,783

 

 

 

Cash NOI

 

21,291

 

11,279

 

 

 

15,528

 

7,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

8,862

 

4,675

 

 

 

6,376

 

3,226

 

 

 

Depreciation and amortization

 

7,335

 

3,901

 

 

 

4,120

 

2,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

7,821

 

4,176

 

references page 14

 

6,419

 

3,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:  Real Estate Depreciation

 

6,382

 

3,387

 

references page 19

 

3,701

 

1,881

 

 

 

Plus:  Extraordinary Loss

 

-

 

-

 

 

 

-

 

-

 

 

 

Plus:  Management & Leasing Fees

 

-

 

-

 

69

 

-

 

-

 

74

 

Funds From Operations

 

14,203

 

7,563

 

 

 

10,120

 

5,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAD Adjustments:

 

Plus: Non Real Estate Depreciation

 

953

 

517

 

 

 

419

 

211

 

 

 

Plus: 2% Allowance for S/L Tenant Credit Loss

 

307

 

164

 

 

 

262

 

135

 

 

 

Less: Free and S/L Rent

 

(3,034

)

(1,637

)

 

 

(1,649

)

(847

)

 

 

Less: Second Cycle Tenant Improvement,

 

(3,624

)

(1,971

)

 

 

(637

)

(310

)

 

 

Less: Second Cycle Leasing Commissions

 

(1,253

)

(684

)

 

 

 

 

 

 

 

 

Less: Recurring Capex

 

(62

)

(32

)

 

 

(76

)

(39

)

 

 

FAD Adjustment

 

(6,713

)

(3,643

)

 

 

(1,681

)

(850

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expense to Real Estate Revenue, net

 

27.36

%

27.42

%

 

 

25.26

%

25.08

%

 

 

GAAP NOI to Real Estate Revenue, net

 

54.75

%

54.72

%

 

 

60.89

%

61.12

%

 

 

Cash NOI to Real Estate Revenue, net

 

47.92

%

47.79

%

 

 

55.04

%

55.22

%

 

 

 

17

 

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

 

($000's omitted)

 

 

 

Common Stock

 

Additional

Paid-In Capital

 

Retained Earnings

 

Deferred

Compensation

Plan

 

Accumulated

Other

Comprehensive

Loss

 

TOTAL

 

Balance at December 31, 2001

 

300

 

583,350

 

39,684

 

(7,515

)

(2,911

)

612,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

74,331

 

 

 

 

 

74,331

 

Preferred Dividend and Accretion

 

 

 

 

 

(9,690

)

 

 

 

 

(9,690

)

Exercise of employee stock options

 

3

 

6,644

 

 

 

 

 

 

 

6,647

 

Cash distributions declared ($1.7925 per  common share)

 

 

 

 

 

(54,267

)

 

 

 

 

(54,267

)

Comprehensive Income - Unrealized loss of derivative instruments

 

 

 

 

 

 

 

 

 

(7,829

)

(7,829

)

Redemption of operating partnership units

 

1

 

3,128

 

 

 

 

 

 

 

3,129

 

Deferred compensation plan

 

 

 

(537

)

 

 

534

 

 

 

(3

)

Amortization of deferred compensation

 

 

 

 

 

 

 

1,419

 

 

 

1,419

 

Balance at December 31, 2002

 

304

 

592,585

 

50,058

 

(5,562

)

(10,740

)

626,645

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

36,347

 

 

 

 

 

36,347

 

Preferred Dividend and Accretion

 

 

 

 

 

(2,431

)

 

 

 

 

(2,431

)

Exercise of employee stock options

 

2

 

3,583

 

 

 

 

 

 

 

3,585

 

Cash distributions declared ($0.465 per  common share)

 

 

 

 

 

(14,446

)

 

 

 

 

(14,446

)

Comprehensive Income - Unrealized loss of derivative instruments

 

 

 

 

 

 

 

 

 

(635

)

(635

)

Redemption of operating partnership units

 

1

 

3,463

 

 

 

 

 

 

 

3,464

 

Deferred compensation plan

 

2

 

4,276

 

 

 

(4,278

)

 

 

-

 

Amortization of deferred compensation

 

 

 

 

 

 

 

616

 

 

 

616

 

Balance at March 31, 2003

 

309

 

603,907

 

69,528

 

(9,224

)

(11,375

)

653,145

 

 

 

RECONCILIATION OF SHARES AND UNITS OUTSTANDING, AND DILUTION COMPUTATION

 

 

 

Common Stock

 

OP Units

 

Stock Options

 

Sub-total

 

Preferred Stock

 

Diluted Shares

 

Balance at December 31, 2002

 

30,421,693

 

2,145,190

 

-

 

32,566,883

 

4,698,900

 

37,265,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD share activity

 

517,628

 

258,876

 

776,504

 

776,504

 

 

 

 

 

Balance at March 31, 2003- Basic

 

30,939,321

 

2,404,066

 

-

 

33,343,387

 

4,698,900

 

38,042,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dilution Factor

 

(233,555

)

(124,364

)

496,952

 

139,033

 

 

 

139,033

 

Balance at March 31, 2003 - Diluted

 

30,705,766

 

2,279,702

 

496,952

 

33,482,420

 

4,698,900

 

38,181,320

 

 

18

 

COMPARATIVE COMPUTATION OF FFO AND FAD

 

Unaudited

($000's omitted - except per share data)

 

 

 

 

 

Three Months Ended March 31,

 

Three Months Ended Dec 31,

 

Three Months Ended Sept 30,

 

 

 

 

 

2003

 

2002

 

% Change

 

2002

 

% Change

 

2002

 

% Change

 

Funds from operations

 

Net Income before Minority Interests and Items

 

18,785

 

18,193

 

3

%

19,574

 

-4

%

19,863

 

-5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

Depreciation and Amortization

 

10,883

 

9,267

 

17

%

10,330

 

5

%

9,711

 

12

%

 

 

FFO from Discontinued Operations

 

957

 

927

 

3

%

898

 

7

%

963

 

-1

%

 

 

FFO adjustment for Joint Ventures

 

3,387

 

1,881

 

80

%

3,359

 

1

%

3,072

 

10

%

Less:

 

Dividends on Preferred Shares

 

2,300

 

2,300

 

0

%

2,300

 

0

%

2,300

 

0

%

 

 

Non Real Estate Depreciation/Amortization of Finance Costs

 

1,484

 

983

 

51

%

1,235

 

20

%

1,047

 

42

%

 

 

Funds From Operations - Basic

 

30,228

 

26,985

 

12

%

30,626

 

-1

%

30,262

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations - Basic per Share

 

0.92

 

0.84

 

9

%

0.94

 

-3

%

0.93

 

-1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

Dividends on Preferred Shares

 

2,300

 

2,300

 

0

%

2,300

 

0

%

2,300

 

0

%

 

 

Funds From Operations - Diluted

 

32,528

 

29,285

 

11

%

32,926

 

-1

%

32,562

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations - Diluted per Share

 

0.85

 

0.78

 

9

%

0.87

 

-2

%

0.86

 

-1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds Available for Distribution

 

FFO

 

 

 

32,528

 

29,285

 

11

%

32,926

 

-1

%

32,562

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

Non Real Estate Depreciation

 

1,463

 

987

 

48

%

1,235

 

18

%

1,046

 

40

%

 

 

2% Allowance for S/L Tenant Credit Loss

 

428

 

516

 

-17

%

634

 

-33

%

974

 

-56

%

 

 

Straight-line Ground Rent

 

160

 

160

 

0

%

60

 

167

%

60

 

167

%

 

 

Non-cash Deferred Compensation

 

616

 

179

 

244

%

425

 

45

%

178

 

245

%

Less:

 

FAD adjustment for Joint Ventures

 

3,441

 

850

 

305

%

1,054

 

226

%

856

 

302

%

 

 

Straight-line Rental Income

 

1,481

 

1,821

 

-19

%

1,191

 

24

%

1,473

 

1

%

 

 

Free Rent - Occupied (Net of Amortization, incl. First Cycle)

 

627

 

715

 

-12

%

(265

)

-337

%

690

 

-9

%

 

 

Amortization of Mortgage Investment Discount

 

82

 

95

 

-14

%

98

 

-16

%

97

 

-15

%

 

 

Second Cycle Tenant Improvements

 

1,460

 

3,603

 

-59

%

3,134

 

-53

%

6,691

 

-78

%

 

 

Second Cycle Leasing Commissions

 

1,456

 

848

 

72

%

730

 

99

%

2,711

 

-46

%

 

 

Revenue Enhancing Recurring CAPEX

 

175

 

-

 

0

%

5

 

3704

%

-

 

0

%

 

 

Non- Revenue Enhancing Recurring CAPEX

 

363

 

88

 

314

%

2,324

 

-84

%

232

 

56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds Available for Distribution

 

26,110

 

23,107

 

13

%

27,008

 

-3

%

22,070

 

18

%

 

 

Diluted per Share

 

0.68

 

0.62

 

10

%

0.72

 

-5

%

0.58

 

17

%

First Cycle Leasing Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant Improvement

 

-

 

78

 

-100

%

-

 

0

%

-

 

0

%

 

 

Leasing Commissions

 

-

 

279

 

-100

%

-

 

0

%

-

 

0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds Available for Distribution after First Cycle Leasing Costs

 

26,110

 

22,750

 

15

%

27,008

 

-3

%

22,070

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds Available for Distribution per Diluted Weighted Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit and Common Share

 

0.68

 

0.60

 

13

%

0.72

 

-4

%

0.58

 

17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment Costs

 

635

 

2,329

 

-73

%

3,318

 

-81

%

2,245

 

-72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payout Ratio of Funds From Operations

 

54.29

%

56.82

%

 

 

53.05

%

 

 

51.38

%

 

 

Payout Ratio of Funds Available for Distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Before First Cycle

 

67.63

%

71.84

%

 

 

64.67

%

 

 

75.81

%

 

 

 

19

 

SELECTED FINANCIAL DATA

 

Capitalization Analysis

Unaudited

($000's omitted)

 

 

 

March 31,

 

December 31,

 

September 30,

 

 

 

2003

 

2002

 

2002

 

2002

 

Market Capitalization

 

Common Equity:

 

 

 

 

 

 

 

 

 

Common Shares Outstanding

 

30,939

 

30,042

 

30,422

 

30,376

 

OP Units Outstanding

 

2,404

 

2,271

 

2,145

 

2,166

 

Total Common Equity (Shares and Units)

 

33,343

 

32,314

 

32,567

 

32,542

 

Share Price (End of Period)

 

30.56

 

33.60

 

31.60

 

30.74

 

Equity Market Value

 

1,018,972

 

1,085,745

 

1,029,101

 

1,000,329

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity at Liquidation Value:

 

115,000

 

115,000

 

115,000

 

115,000

 

 

 

 

 

 

 

 

 

 

 

Real Estate Debt

 

Property Level Mortgage Debt

 

636,290

 

408,186

 

388,404

 

395,800

 

Company's portion of Joint Venture Mortgages

 

396,194

 

225,133

 

396,361

 

396,513

 

Outstanding Balance on - Term Loan

 

100,000

 

-

 

100,000

 

-

 

Outstanding Balance on – Secured Credit Line

 

-

 

34,931

 

-

 

30,931

 

Outstanding Balance on – Unsecured Credit Line

 

51,000

 

52,000

 

74,000

 

143,000

 

Total Combined Debt

 

1,183,484

 

720,250

 

958,765

 

966,244

 

 

 

 

 

 

 

 

 

 

 

Total Market Cap (Debt & Equity)

 

2,317,455

 

1,920,995

 

2,102,865

 

2,081,572

 

 

 

 

 

 

 

 

 

 

 

Availability

 

Senior Unsecured Line of Credit

 

 

 

 

 

 

 

 

 

Maximum Line Available

 

300,000

 

300,000

 

300,000

 

300,000

 

Letters of Credit issued

 

5,000

 

30,000

 

15,000

 

5,000

 

Outstanding Balance

 

51,000

 

52,000

 

74,000

 

143,000

 

Net Line Availability

 

244,000

 

218,000

 

211,000

 

152,000

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Term Loan

 

 

 

 

 

 

 

 

 

Maximum Available

 

150,000

 

-

 

150,000

 

-

 

Outstanding Balance

 

100,000

 

-

 

100,000

 

-

 

Net  Availability

 

50,000

 

-

 

50,000

 

-

 

 

 

 

 

 

 

 

 

 

 

Secured Line of Credit

 

 

 

 

 

 

 

 

 

Maximum Line Available

 

75,000

 

75,000

 

75,000

 

75,000

 

Outstanding Balance

 

-

 

34,931

 

-

 

30,931

 

Net Line Availability

 

75,000

 

40,069

 

75,000

 

44,069

 

Total Availability under Lines of Credit & Term Loan

 

369,000

 

258,069

 

336,000

 

196,069

 

 

 

 

 

 

 

 

 

 

 

Ratio Analysis

 

Consolidated Basis

 

 

 

 

 

 

 

 

 

Debt to Market Cap Ratio

 

40.98

%

29.20

%

32.96

%

33.81

%

Debt to Gross Real Estate Book Ratio (1)

 

59.88

%

46.82

%

58.37

%

56.45

%

Secured Real Estate Debt to Secured Assets Gross Book (1)

 

70.87

%

66.04

%

66.18

%

67.68

%

Unsecured Debt to Unencumbered

 

 

 

 

 

 

 

 

 

Assets-Gross Book Value (1)

 

12.12

%

14.03

%

20.30

%

39.29

%

Secured Line of Credit to Structured Finance Assets (1)

 

0.00

%

27.36

%

0.00

%

15.89

%

Joint Ventures Allocated

 

 

 

 

 

 

 

 

 

Combined Debt to Market Cap Ratio

 

51.07

%

37.49

%

45.59

%

46.42

%

Debt to Gross Real Estate Book Ratio (1)

 

61.81

%

51.71

%

61.41

%

60.34

%

Secured Debt to Secured Assets Gross Book (1)

 

68.94

%

47.58

%

66.24

%

67.13

%

 

(1)   Excludes property level capital obligations.

 

20

 

SELECTED FINANCIAL DATA

 

Property NOI and Coverage Ratios

Unaudited

($000's omitted)

 

 

 

 

 

Three Months Ended March 31,

 

Three Months Ended December 31,

 

 

 

 

 

2003

 

2002

 

+/-

 

% Change

 

2002

 

+/-

 

% Change

 

Funds from operations

 

30,228

 

26,985

 

3,243

 

12

%

30,626

 

(398

)

-1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

Non – Building Revenue

 

9,597

 

8,294

 

1,303

 

16

%

11,452

 

(1,855

)

-16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

Interest Expense (incl. Capital Lease Int.)

 

10,305

 

9,112

 

1,193

 

13

%

9,809

 

496

 

5

%

 

 

Non Real Estate Depreciation

 

1,463

 

987

 

476

 

48

%

1,235

 

228

 

18

%

 

 

MG&A Expense

 

3,186

 

3,202

 

(16

)

0

%

3,563

 

(377

)

-11

%

 

 

Preferred Dividend

 

2,300

 

2,300

 

-

 

0

%

2,300

 

(0

)

0

%

 

 

GAAP NOI

 

37,885

 

34,292

 

3,593

 

10

%

36,080

 

1,805

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash adjustments

 

Less:

 

Free Rent (Net of Amortization)

 

1,224

 

1,017

 

207

 

20

%

66

 

1,158

 

1755

%

 

 

Straightline Revenue Adjustment

 

2,541

 

2,366

 

175

 

7

%

1,096

 

1,445

 

132

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

Ground Lease Straight-line Adjustment

 

160

 

160

 

-

 

0

%

160

 

-

 

0

%

 

 

Cash NOI

 

34,280

 

31,069

 

3,211

 

10

%

35,078

 

(799

)

-2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Revenue, net

 

64,514

 

55,491

 

9,023

 

16

%

57,136

 

7,378

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins

 

 

 

GAAP NOI/Real Estate Revenue, net

 

58.72

%

61.80

%

 

 

 

 

63.15

%

 

 

 

 

 

 

Cash NOI/Real Estate Revenue, net

 

53.14

%

55.99

%

 

 

 

 

61.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP NOI before Ground Rent/Real Estate Revenue, net

 

63.63

%

68.41

%

 

 

 

 

68.68

%

 

 

 

 

 

 

Cash NOI before Ground Rent/Real Estate Revenue, net

 

57.79

%

62.31

%

 

 

 

 

66.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of debt and fixed charges

 

 

 

Interest on Fixed Rate Loans

 

6,232

 

5,628

 

604

 

11

%

5,921

 

311

 

5

%

 

 

Interest on Floating Rate Loans

 

4,073

 

3,484

 

589

 

17

%

3,888

 

185

 

5

%

 

 

Fixed Amortization Principal Payments

 

930

 

1,713

 

(783

)

-46

%

1,659

 

(729

)

-44

%

 

 

Total Debt Service

 

11,235

 

10,825

 

410

 

4

%

11,468

 

(233

)

-2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments under Ground Lease Arrangements

 

3,004

 

2,999

 

5

 

0

%

2,999

 

5

 

0

%

 

 

Preferred Stock Dividend

 

2,300

 

2,300

 

-

 

0

%

2,300

 

-

 

0

%

 

 

Total Fixed Charges

 

16,539

 

16,124

 

415

 

3

%

16,767

 

(228

)

-1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

43,695

 

39,849

 

 

 

 

 

45,967

 

 

 

 

 

Interest Coverage Ratio

 

4.24

 

4.37

 

 

 

 

 

4.69

 

 

 

 

 

Debt Service Coverage ratio

 

3.89

 

3.68

 

 

 

 

 

4.01

 

 

 

 

 

Fixed Charge Coverage ratio

 

2.64

 

2.47

 

 

 

 

 

2.74

 

 

 

 

 

 

21

 

SELECTED FINANCIAL DATA

 

2003 Same Store

Unaudited

($000's omitted)

 

 

 

 

 

Three Months Ended March 31,

 

Three Months Ended December 31,

 

 

 

 

 

2003

 

2002

 

+/-

 

% Change

 

2002

 

+/-

 

% Change

 

Revenues

 

 

 

Rental Revenue

 

48,682

 

46,321

 

2,361

 

5

%

47,796

 

886

 

2

%

 

 

Credit Loss

 

(386

)

(513

)

127

 

-25

%

(434

)

48

 

-11

%

 

 

Signage Rent

 

294

 

466

 

(172

)

-37

%

564

 

(270

)

-48

%

 

 

Escalation & Reimbursement Revenues

7,689

 

6,680

 

1,009

 

15

%

7,584

 

105

 

1

%

 

 

Investment & Other Income

 

721

 

415

 

306

 

74

%

1,038

 

(317

)

-31

%

 

 

Total Revenues

 

57,000

 

53,369

 

3,631

 

7

%

56,548

 

452

 

1

%

Expenses

 

 

 

Operating Expense

 

14,918

 

12,621

 

2,297

 

18

%

13,770

 

1,148

 

8

%

 

 

Ground Rent

 

3,159

 

3,159

 

(0

)

0

%

3,159

 

-

 

0

%

 

 

Real Estate Taxes

 

9,184

 

7,058

 

2,126

 

30

%

7,653

 

1,531

 

20

%

 

 

 

 

27,261

 

22,838

 

4,423

 

19

%

24,582

 

2,679

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

29,739

 

30,531

 

(792

)

-3

%

31,966

 

(2,227

)

-7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

7,133

 

7,243

 

(110

)

-2

%

7,274

 

(141

)

-2

%

 

 

Depreciation & Amortization

 

8,311

 

8,178

 

133

 

2

%

9,137

 

(826

)

-9

%

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Minority Interest

 

14,295

 

15,110

 

(815

)

-5

%

15,555

 

(1,260

)

-8

%

Plus:

 

Real Estate Depreciation & Amortization

 

8,061

 

7,875

 

186

 

2

%

8,684

 

(623

)

-7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

22,356

 

22,985

 

(629

)

-3

%

24,239

 

(1,883

)

-8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

Non – Building Revenue

 

409

 

301

 

108

 

36

%

826

 

(417

)

-50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

Interest Expense

 

7,133

 

7,243

 

(110

)

-2

%

7,274

 

(141

)

-2

%

 

 

Non Real Estate Depreciation

 

250

 

303

 

(53

)

-17

%

453

 

(203

)

-45

%

 

 

GAAP NOI

 

29,330

 

30,230

 

(900

)

-3

%

31,140

 

(1,810

)

-6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Adjustments

 

Less:

 

Free Rent (Net of Amortization)

 

479

 

708

 

(229

)

-32

%

(265

)

744

 

-281

%

 

 

Straightline Revenue Adjustment

 

1,329

 

1,762

 

(433

)

-25

%

1,159

 

170

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

Ground Lease Straight-line Adjustment

 

160

 

160

 

-

 

0

%

160

 

-

 

0

%

 

 

Cash NOI

 

27,682

 

27,920

 

(238

)

-1

%

30,406

 

(2,724

)

-9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margins

 

 

 

GAAP NOI to Real Estate Revenue, net

 

51.48

%

56.42

%

 

 

 

 

55.45

%

 

 

 

 

 

 

Cash NOI to Real Estate Revenue, net

 

48.58

%

52.11

%

 

 

 

 

54.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP NOI before Ground Rent/Real Estate Revenue, net

 

57.02

%

62.32

%

 

 

 

 

61.08

%

 

 

 

 

 

 

Cash NOI before Ground Rent/Real Estate Revenue, net

 

53.85

%

57.71

%

 

 

 

 

59.49

%

 

 

 

 

 

22

 

DEBT SUMMARY SCHEDULE

 

Unaudited

($000's omitted)

 

 

 

 

 

Principal O/S

Outstanding

3/31/2003

 

Coupon

 

Fixed

Annual

Payment

 

2003

Principal

Repayment

 

Maturity

Date

 

Due at

Maturity

 

As-Of

Right

Extension

 

Earliest

Prepayment

 

Fixed rate debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured fixed Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

125 Broad Street

 

76,641

 

8.29

%

7,058

 

799

 

10/11/2007

 

72,320

 

-

 

Oct-03

 

673 First Avenue

 

35,000

 

5.67

%

1,985

 

-

 

2/20/2013

 

29,863

 

-

 

Feb-06

 

CIBC (against 1414 Ave. of Americas and 70 W. 36th St.)

 

25,591

 

7.90

%

2,429

 

363

 

5/1/2009

 

12,196

 

-

 

Apr-03

 

711 Third Avenue

 

48,333

 

8.13

%

4,420

 

410

 

9/10/2005

 

47,247

 

-

 

Jun-04

 

555 West 57th Street (Libor collar of 6.10% - 6.58% + 200bps)

 

68,085

 

8.10

%

5,590

 

-

 

11/4/2004

 

66,959

 

-

 

Open

 

420 Lexington Avenue

 

122,640

 

8.44

%

12,463

 

1,771

 

11/1/2010

 

104,406

 

-

 

Open

 

317 Madison (Libor Swap of 4.01% + 180bps)

 

65,000

 

5.81

%

3,829

 

-

 

8/20/2004

 

65,000

 

8/20/2006

 

Open

 

875 Bridgeport Avenue, CT (1031 exchange asset)

 

14,821

 

8.32

%

1,299

 

63

 

5/10/2025

 

5,466

 

-

 

Open

 

 

 

 

 

456,111

 

7.71

%

39,072

 

3,406

 

 

 

 

 

 

 

 

 

Unsecured fixed rate debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Unsecured Term Loan (Libor swap of 1.64% + 150bps) (1)

 

100,000

 

3.14

%

3,140

 

-

 

11/5/2007

 

100,000

 

-

 

Nov-05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Fixed Rate Debt/Wtd Avg

 

556,111

 

6.89

%

42,212

 

3,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating rate Debt

 

Secured floating rate debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Structured Finance Loan  (Libor + 100bp)

 

22,178

 

2.38

%

 

 

-

 

11/1/2003

 

22,178

 

-

 

Nov-03

(4)

220 E 42nd Street

 

158,000

 

3.12

%

 

 

-

 

9/1/2004

 

158,000

 

-

 

Sep-04

 

Secured Line of Credit (Libor + 150bps)

 

-

 

0.00

%

 

 

-

 

12/22/2004

 

-

 

12/22/2005

 

Open

 

Total Floating Rate Secured Debt/Wtd Avg

 

180,178

 

3.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured floating rate debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Unsecured Line of Credit (Libor + 150 bps)

 

51,000

 

2.96

%

 

 

-

 

3/20/2006

 

51,000

 

-

 

Open

 

Total Floating Rate Unsecured Debt/Wtd Avg

 

51,000

 

2.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Floating Rate Debt Outstanding

 

231,178

 

3.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt/Wtd Avg

 

787,290

 

5.75

%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Balance & Interest Rate

 

653,295

 

5.60

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY OF JOINT VENTURE DEBT

 

 

 

Principal O/S

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Principal

 

SLG Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joint Venture Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

180 Madison JV

 

31,650

 

15,794

 

7.81

%

2,788

 

300

 

12/1/2005

 

30,778

 

-

 

Open

 

1250 Broadway (Libor Swap of 4.03% + 250bp) (2)

 

85,000

 

46,750

 

6.53

%

5,551

 

-

 

10/1/2004

 

85,000

 

10/1/2006

 

Open

 

1515 Broadway (Libor + 191 bps) (3)

 

335,000

 

184,250

 

4.22

%

-

 

-

 

5/14/2004

 

184,250

 

5/14/2006

 

Open

 

321 W 44th JV (Libor + 250bps)

 

22,000

 

7,700

 

3.85

%

-

 

-

 

4/30/2003

 

7,700

 

-

 

Open

 

1 Park Avenue (Libor + 150 bps)

 

150,000

 

82,500

 

2.87

%

-

 

-

 

1/10/2004

 

82,500

 

-

 

Open

 

100 Park Avenue JV

 

118,636

 

59,199

 

8.00

%

10,211

 

478

 

9/1/2010

 

107,488

 

-

 

Open

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Joint Venture Debt/Wtd Avg

742,285

 

396,194

 

4.91

%

18,549

 

778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Balance  & Interest Rate with SLG JV debt

 

 

 

1,054,045

 

5.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)   Libor swap on debt is stepped. On Janary 4, 2004 base swap will increase to 4.06% for balance of the term. The weighted libor base is 3.56%.

(2)   Swap on 1250 mortgage executed on SLG portion only through January 11, 2005.

(3)   Spread on 1515 is weighted for first mortgage and mezzanine pieces. In August 2002 a swap at a Libor of 2.29% was placed on $100mm of SL Green's share of debt.

(4)   Extension option exercised November 2002.

 

23

 

SUMMARY OF GROUND LEASE ARRANGEMENTS

 

Consolidated Statement  (REIT)

($000's omitted)

 

Property

 

2003 Scheduled

Cash Payment

 

2004 Scheduled

Cash Payment

 

2005 Scheduled

Cash Payment

 

2006 Scheduled

Cash Payment

 

Deferred Land

Lease Obligations (1)

 

Year of

Maturity

 

Operating Leases

 

673 First Avenue

 

3,010

 

3,010

 

3,108

 

3,304

 

13,311

 

2037

 

1140 Avenue of Americas (2)

 

348

 

348

 

348

 

348

 

-

 

2016

(3)

420 Lexington Avenue (2)

 

7,074

 

7,074

 

7,074

 

7,074

 

-

 

2008

(4)

711 Third Avenue (2) (5)

 

1,550

 

1,550

 

1,550

 

1,550

 

1,475

 

2032

 

125 Broad Street

 

1,075

 

1,075

 

1,075

 

1,075

 

-

 

2067

(6)

Total

 

13,057

 

13,057

 

13,155

 

13,351

 

14,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized Lease

 

 

 

 

 

 

 

 

 

 

 

 

 

673 First Avenue

 

1,290

 

1,290

 

1,322

 

1,416

 

15,937

 

2037

 

 

(1)   Per the balance sheet at March 31, 2003.

(2)   These ground leases are classified as operating leases and, therefore, do not appear on the balance sheet as an obligation.

(3)   The Company has a unilateral option to extend the ground lease for an additional 50 years to 2066.

(4)   Subject to renewal at the Company's option through 2029.

(5)   Excludes portion payable to SL Green as owner of 50% leasehold.

(6)   The Company has an option to extend the ground lease for five years and six months starting January 1, 2068. The Condo Association can purchased the ground lease for $15 million.

 

24

 

STRUCTURED FINANCE

 

($000's omitted)

 

 

 

Assets

Outstanding

 

Wtd Average

Assets during quarter

 

Wtd Average

Yield during quarter

 

Current

Yield

 

Libor

Rate

 

3/31/2002

 

189,120

 

188,644

 

12.63

%

12.82

%

1.88

%

 

 

 

 

 

 

 

 

 

 

 

 

Originations/Accretion

 

20,300

 

 

 

 

 

 

 

 

 

Preferred Equity

 

6,000

 

 

 

 

 

 

 

 

 

Redemptions

 

(20,172

)

 

 

 

 

 

 

 

 

6/30/2002

 

195,248

 

175,907

 

12.65

%

12.67

%

1.86

%

 

 

 

 

 

 

 

 

 

 

 

 

Originations/Accretion

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

-

 

 

 

 

 

 

 

 

 

Redemptions

 

(539

)

 

 

 

 

 

 

 

 

9/30/2002

 

194,709

 

194,709

 

12.45

%

12.40

%

1.82

%

 

 

 

 

 

 

 

 

 

 

 

 

Originations/Accretion

 

500

 

 

 

 

 

 

 

 

 

Preferred Equity

 

-

 

 

 

 

 

 

 

 

 

Redemptions

 

(49,570

)

 

 

 

 

 

 

 

 

12/31/2002

 

145,639

 

194,693

 

12.51

%

12.68

%

1.35

%

 

 

 

 

 

 

 

 

 

 

 

 

Originations/Accretion

 

23,040

 

 

 

 

 

 

 

 

 

Preferred Equity

 

(53,500

)

 

 

 

 

 

 

 

 

Redemptions

 

(683

)

 

 

 

 

 

 

 

 

3/31/2003

 

114,496

 

125,180

 

12.38

%(2)

12.73

%(3)

1.24

%(4)

 

(1)   Accretion includes original issue discounts and compounding investment income.

(2)   As of  March 31, 2003, net of seller financing, the weighted yield is 10.52%.

(3)   As of   March 31, 2003, net of seller financing, the current yield is 10.73%.

(4)   At quarter end $39mm of assets have fixed index rates. The weighted average base rate is 3.20%.

 

25

 

STRUCTURED FINANCE

 

($000's omitted)

 

Type of Investment

 

Quarter End Balance(1)

 

Senior Financing

 

Exposure Psf

 

Wtd Average

Yield during quarter(2)

 

Current

Yield(3)

 

Junior Mortgage Participation

 

$

43,010

 

$

250,277

 

$

128

 

13.75

%

14.26

%

 

 

 

 

 

 

 

 

 

 

 

 

Mezzanine Debt

 

$

50,136

 

$

313,600

 

$

184

 

11.59

%

11.60

%

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Equity

 

$

21,351

 

$

145,000

 

$

136

 

13.20

%

13.89

%

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of 3/31/03

 

$

114,496

 

$

708,877

 

$

154

 

12.38

%

12.73

%

 

Current Maturity Profile

 

 

(1)   Most investments are indexed to Libor and are prepayable at dates prior to maturity subject to certain prepayment penalties or fees.

(2)   As of  March 31, 2003, net of seller financing, the weighted yield is 10.52%.

(3)   As of   March 31, 2003, net of seller financing, the current yield is 10.73%.

 

26

 

SELECTED PROPERTY DATA

 

 

 

 

 

 

 

 

 

 

 

Leased

 

 

 

Annualized Rent

 

 

 

Properties

 

Submarket

 

Ownership

 

Rentable
Sq. Feet

 

% of Total
Sq. Feet

 

Mar-03

 

Dec-02

 

Sep-02

 

Jun-02

 

Mar-02

 

Annualized
Rent ($'s)

 

100%

 

SLG

 

Total
Tenants

 

PROPERTIES 100% OWNED

 

“Same Store”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1140 Avenue of the Americas

 

Rockefeller Center

 

Leasehold Interest

 

191,000

 

1

 

97.1

 

97.8

 

95.5

 

95.5

 

95.5

 

7,584,213

 

3

 

2

 

26

 

110 East 42nd Street

 

Grand Central

 

Fee Interest

 

181,000

 

1

 

98.6

 

98.6

 

97.9

 

97.8

 

99.8

 

6,109,705

 

2

 

2

 

28

 

1372 Broadway

 

Times Square South

 

Fee Interest

 

508,000

 

4

 

99.6

 

97.9

 

97.8

 

97.2

 

97.2

 

15,242,432

 

6

 

5

 

29

 

1414 Avenue of the Americas

 

Rockefeller Center

 

Fee Interest

 

111,000

 

1

 

93.0

 

94.3

 

96.5

 

97.6

 

97.6

 

4,020,171

 

2

 

1

 

23

 

1466 Broadway

 

Times Square

 

Fee Interest

 

289,000

 

2

 

89.3

 

88.6

 

86.2

 

84.4

 

84.9

 

9,880,586

 

4

 

3

 

96

 

17 Battery Place - North

 

World Trade/ Battery

 

Fee Interest

 

419,000

 

3

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

9,343,548

 

4

 

3

 

7

 

286 Madison Avenue

 

Grand Central South

 

Fee Interest

 

112,000

 

1

 

94.8

 

93.0

 

92.6

 

94.7

 

97.9

 

3,304,282

 

1

 

1

 

36

 

290 Madison Avenue

 

Grand Central South

 

Fee Interest

 

37,000

 

0

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

1,390,274

 

1

 

0

 

4

 

292 Madison Avenue

 

Grand Central South

 

Fee Interest

 

187,000

 

1

 

95.4

 

99.7

 

99.7

 

99.7

 

98.3

 

7,006,463

 

3

 

2

 

18

 

317 Madison Avenue

 

Grand Central

 

Fee Interest

 

450,000

 

3

 

96.1

 

93.4

 

94.3

 

94.5

 

94.0

 

13,987,965

 

6

 

4

 

105

 

420 Lexington Ave (Graybar)

 

Grand Central North

 

Operating Sublease

 

1,188,000

 

9

 

95.4

 

95.0

 

93.2

 

95.8

 

94.0

 

44,027,612

 

18

 

13

 

239

 

440 Ninth Avenue

 

Times Square South

 

Fee Interest

 

339,000

 

3

 

92.5

 

92.3

 

97.1

 

86.7

 

86.7

 

7,912,782

 

3

 

2

 

13

 

470 Park Avenue South

 

Park Avenue South/ Flatiron

 

Fee Interest

 

260,000

 

2

 

92.7

 

99.7

 

99.3

 

99.3

 

98.8

 

7,435,463

 

3

 

2

 

23

 

555 West 57th

 

Midtown West

 

Fee Interest

 

941,000

 

7

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

20,835,113

 

8

 

6

 

22

 

673 First Avenue

 

Grand Central South

 

Leasehold Interest

 

422,000

 

3

 

99.8

 

99.8

 

99.8

 

99.8

 

99.8

 

13,363,213

 

5

 

4

 

17

 

70 West 36th Street

 

Times Square South

 

Fee Interest

 

151,000

 

1

 

90.4

 

92.3

 

93.1

 

94.3

 

99.2

 

3,786,117

 

2

 

1

 

31

 

711 Third Avenue

 

Grand Central North

 

Operating Sublease (1)

 

 

524,000

 

4

 

99.8

 

99.1

 

100.0

 

100.0

 

100.0

 

19,523,531

 

8

 

6

 

19

 

1370 Broadway

 

Times Square South

 

Fee Interest

 

255,000

 

2

 

95.1

 

89.5

 

92.3

 

92.3

 

98.0

 

7,144,883

 

3

 

2

 

26

 

Subtotal / Weighted Average

 

6,565,000

 

51

 

96.8

 

96.6

 

96.6

 

96.5

 

96.5

 

201,898,353

 

81

 

61

 

762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

125 Broad Street

 

Downtown

 

Fee Interest

 

525,000

 

4

 

100.0

 

 

 

 

 

 

 

 

 

15,452,628

 

6

 

4

 

5

 

220 East 42nd Street

 

Grand Central East

 

Fee Interest

 

1,135,000

 

9

 

91.9

 

 

 

 

 

 

 

 

 

31,728,242

 

13

 

10

 

44

 

Subtotal / Weighted Average

 

1,660,000

 

13

 

94.5

 

 

 

 

 

 

 

 

 

47,180,870

 

19

 

14

 

49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total/ Weighted Average Properties 100% Owned

 

8,225,000

 

65

 

96.3

 

96.6

 

96.6

 

96.5

 

96.6

 

249,079,223

 

100

 

75

 

811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTIES <100% OWNED

 

Unconsolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

180 Madison Avenue - 50%

 

Grand Central South

 

Fee Interest

 

265,000

 

2

 

83.8

 

82.0

 

82.1

 

87.3

 

89.7

 

6,982,848

 

 

 

1

 

50

 

1 Park Avenue - 55%

 

Grand Central South

 

Various Interests

 

913,000

 

7

 

85.9

 

98.6

 

98.6

 

98.4

 

98.3

 

24,663,185

 

 

 

5

 

17

 

1250 Broadway -55%

 

Penn Station

 

Fee Interest

 

670,000

 

5

 

98.2

 

98.5

 

99.3

 

99.3

 

99.5

 

21,920,853

 

 

 

4

 

26

 

100 Park Avenue - 50%

 

Grand Central South

 

Fee Interest

 

834,000

 

6

 

98.3

 

99.0

 

100.0

 

100.0

 

100.0

 

29,857,593

 

 

 

4

 

36

 

1515 Broadway - 55%

 

Times Square

 

Fee Interest

 

1,750,000

 

14

 

96.7

 

98.5

 

98.3

 

98.5

 

 

 

63,139,398

 

 

 

10

 

18

 

321 West 44th Street -35%

 

Times Square

 

Fee Interest

 

203,000

 

2

 

90.6

 

90.6

 

90.2

 

97.7

 

97.4

 

4,743,694

 

 

 

1

 

27

 

Subtotal / Weighted Average

 

4,635,000

 

36

 

94.1

 

97.3

 

97.5

 

98.2

 

98.1

 

151,307,570

 

 

 

25

 

174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand Total/ Weighted Average

 

12,860,000

 

100

 

95.5

 

96.9

 

97.0

 

97.2

 

97.0

 

400,386,793

 

 

 

 

 

985

 

Grand Total - SLG share of Annualized Rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

329,470,786

 

 

 

100

 

 

 

(1)   Including Ownership of 50% in Building Fee

27

 

LARGEST TENANTS BY SQUARE FEET LEASED

 

Wholly Owned Portfolio + Allocated JV Properties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of

 

 

 

 

 

 

 

Total

 

 

 

 

 

% of

 

SLG Share of

 

SLG Share of

 

 

 

 

 

Lease

 

Leased

 

Annualized

 

PSF

 

Annualized

 

Annualized

 

Annualized

 

Tenant

 

Property

 

Expiration

 

Square Feet

 

Rent ($)

 

Annualized

 

Rent

 

Rent($)

 

Rent

 

Viacom International, Inc.

 

1515 Broadway

 

2004, 2006, 2008, 2009, 2013

 

1,280,108

 

$

53,496,216

 

$

41.79

 

13.4

%

$

29,422,919

 

8.9

%

Omnicom Group

 

220 East 42nd Street

 

2008, 2009, 2010, 2017

 

419,111

 

$

11,705,772

 

$

27.93

 

2.9

%

$

11,705,772

 

3.6

%

Salomon Smith Barney

 

125 Broad Street

 

2005, 2006, 2010, 2011

 

330,900

 

$

9,663,636

 

$

29.20

 

2.4

%

$

9,663,636

 

2.9

%

The City of New York

 

17 Battery Place

 

2012

 

325,664

 

$

5,701,920

 

$

17.51

 

1.4

%

$

5,701,920

 

1.7

%

Visting Nurse Services

 

1250 Broadway

 

2005, 2006 & 2011

 

251,251

 

$

7,022,544

 

$

27.95

 

1.8

%

$

3,862,399

 

1.2

%

City University of New York -CUNY

 

555 West 57th Street

 

2010, 2011, & 2015

 

249,854

 

$

5,701,920

 

$

22.82

 

1.4

%

$

5,701,920

 

1.7

%

BMW of Manhattan, Inc.

 

555 West 57th Street

 

2012

 

227,782

 

$

3,330,660

 

$

14.62

 

0.8

%

$

3,330,660

 

1.0

%

Philip Morris Managament Corp

 

100 Park Avenue

 

2007

 

175,887

 

$

6,771,024

 

$

38.50

 

1.7

%

$

3,378,741

 

1.0

%

J&W Seligman & Co., Inc.

 

100 Park Avenue

 

2009

 

168,390

 

$

5,326,740

 

$

31.63

 

1.3

%

$

2,658,043

 

0.8

%

C.B.S., Inc.

 

555 West 57th Street

 

2010

 

165,214

 

$

3,756,864

 

$

22.74

 

0.9

%

$

3,756,864

 

1.1

%

Segal Company

 

1  Park Avenue

 

2009

 

157,944

 

$

5,722,068

 

$

36.23

 

1.4

%

$

3,147,137

 

1.0

%

Metro North Commuter Railroad Co.

 

420 Lexington Avenue

 

2008 & 2016

 

134,687

 

$

3,928,716

 

$

29.17

 

1.0

%

$

3,928,716

 

1.2

%

St. Luke's Roosevelt Hospital

 

555 West 57th Street

 

2014

 

133,700

 

$

3,205,656

 

$

23.98

 

0.8

%

$

3,205,656

 

1.0

%

Tribune Newspaper

 

220 East 42nd Street

 

2010

 

131,665

 

$

3,844,644

 

$

29.20

 

1.0

%

$

3,844,644

 

1.2

%

Coty Inc.

 

1 Park Avenue

 

2015

 

102,654

 

$

3,842,592

 

$

37.43

 

1.0

%

$

2,113,426

 

0.6

%

Minskoff/Nederlander JV (1)

 

1515 Broadway

 

2024

 

102,452

 

$

210,000

 

$

2.05

 

0.1

%

$

115,500

 

0.0

%

Ross Stores

 

1372 Broadway

 

2010

 

101,741

 

$

2,761,752

 

$

27.14

 

0.7

%

$

2,761,752

 

0.8

%

Ketchum, Inc.

 

711 Third Avenue

 

2015

 

100,876

 

$

4,343,568

 

$

43.06

 

1.1

%

$

4,343,568

 

1.3

%

CHF Industries

 

1 Park Avenue

 

2005

 

100,000

 

$

3,512,460

 

$

35.12

 

0.9

%

$

1,931,853

 

0.6

%

New York Presbyterian Hospital

 

555 West 57th Street & 673 First Avenue

 

2006 & 2009

 

99,650

 

$

2,862,744

 

$

28.73

 

0.7

%

$

2,862,744

 

0.9

%

Ann Taylor Inc.

 

1372 Broadway

 

2010

 

93,020

 

$

2,738,340

 

$

29.44

 

0.7

%

$

2,738,340

 

0.8

%

United Nations Population Fund

 

220 East 42nd Street

 

2010

 

91,021

 

$

3,936,840

 

$

43.25

 

1.0

%

$

3,936,840

 

1.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crain Communications Inc.

 

711 Third Avenue

 

2009

 

90,531

 

$

3,439,656

 

$

37.99

 

0.9

%

$

3,439,656

 

1.0

%

Information Builders Inc

 

1250 Broadway

 

2003

 

88,571

 

$

2,171,772

 

$

24.52

 

0.5

%

$

1,194,475

 

0.4

%

Advanstar Communications

 

1 Park Avenue

 

2010

 

85,284

 

$

3,011,532

 

$

35.31

 

0.8

%

$

1,656,343

 

0.5

%

TOTAL

 

5,207,957

 

$

162,009,636

 

$

31.11

 

40.5

%

$

120,403,523

 

36.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholly Owned Portfolio + Allocated JV Properties

 

12,860,000

 

$

400,386,793

 

$

31.13

 

 

 

$

329,470,786

 

 

 

 

(1)   Minskoff/Nederlander JV pays percentage rent.

 

28

 

FIRST QUARTER 2003 - LEASING ACTIVITY

 

Available Space

 

Activity Type

 

Building Address

 

# of Leases

 

Usable SF

 

Rentable SF

 

Rent/Rentable SF ($'s)

 

Vacancy at 12/31/02

 

 

 

 

 

358,910

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Vacancies

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

220 East 42nd Street

 

 

 

97,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold  Vacancies

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

50 West 23rd Street

 

 

 

(9,479

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expiring Space

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

3

 

3,653

 

4,373

 

27.52

 

 

 

1515 Broadway

 

2

 

31,215

 

31,215

 

65.70

 

 

 

1 Park Avenue

 

2

 

216,365

 

216,365

 

41.71

 

 

 

180 Madison Avenue

 

3

 

3,043

 

3,043

 

35.08

 

 

 

100 Park Avenue

 

2

 

7,441

 

9,675

 

30.87

 

 

 

1250 Broadway

 

1

 

2,091

 

3,072

 

42.00

 

 

 

286 Madison

 

1

 

1,674

 

2,102

 

31.51

 

 

 

292 Madison

 

1

 

8,113

 

10,113

 

26.17

 

 

 

1414 Ave of Americas

 

1

 

1,430

 

1,850

 

25.92

 

 

 

70 West 36th Street

 

1

 

2,733

 

3,789

 

20.24

 

 

 

470 Park Avenue South

 

3

 

18,122

 

24,767

 

28.92

 

 

 

1140 Sixth Avenue

 

1

 

1,317

 

1,870

 

32.00

 

 

 

110 East 42nd Street

 

1

 

594

 

785

 

32.48

 

 

 

321 W 44th Street

 

1

 

3,794

 

4,548

 

20.00

 

 

 

1466 Broadway

 

13

 

11,504

 

14,455

 

33.44

 

 

 

420 Lexington Avenue

 

12

 

28,041

 

30,341

 

35.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total/Weighted Average

 

48

 

341,130

 

362,363

 

40.37

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison

 

1

 

51

 

51

 

12.00

 

 

 

1 Park Avenue

 

1

 

2,079

 

2,654

 

22.00

 

 

 

1466 Broadway

 

1

 

359

 

359

 

6.69

 

 

 

420 Lexington Avenue

 

1

 

149

 

219

 

18.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total/Weighted Average

 

4

 

2,638

 

3,283

 

19.90

 

 

 

 

 

 

 

 

 

 

 

 

 

Move Outs

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

1

 

1,791

 

2,558

 

41.82

 

 

 

1414 Sixth Avenue

 

1

 

1,567

 

2,381

 

44.02

 

 

 

1372 Broadway

 

1

 

3,016

 

3,016

 

45.44

 

 

 

1466 Broadway

 

3

 

3,203

 

4,620

 

30.41

 

 

 

420 Lexington Avenue

 

1

 

81

 

116

 

27.32

 

 

 

Total/Weighted Average

 

7

 

9,658

 

12,691

 

38.81

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

420 Lexington Avenue

 

1

 

200

 

200

 

37.08

 

 

 

Total/Weighted Average

 

1

 

200

 

200

 

37.08

 

 

 

 

 

 

 

 

 

 

 

 

 

Relocating Tenants

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

1

 

1,371

 

1,535

 

48.59

 

 

 

1466 Broadway

 

1

 

1,649

 

2,215

 

41.20

 

 

 

420 Lexington Avenue

 

4

 

11,575

 

15,445

 

53.92

 

 

 

Total/Weighted Average

 

6

 

14,595

 

19,195

 

52.02

 

Available Space

 

Office

 

 

 

61

 

365,383

 

394,249

 

40.89

 

Retail

 

 

 

1

 

200

 

200

 

37.08

 

Storage

 

 

 

4

 

2,638

 

3,283

 

19.90

 

 

 

Total

 

66

 

368,221

 

397,732

 

40.71

 

 

 

 

 

 

 

 

 

 

 

 

 

Available Space

 

 

 

 

 

814,961

 

 

 

 

 

 

*      Escalated Rent is calculated as Total Annual Income less Electric Charges.

 

29

 

FIRST QUARTER - 2003 LEASING ACTIVITY

 

Leased Space

 

Activity Type

 

Building Address

 

# of Leases

 

Term

(Yrs)

 

Usable SF

 

Rentable SF

 

New Cash Rent /

Rentable SF

 

Prev. Escalated Rent/

Rentable SF

 

T.I /

Rentable SF

 

Free Rent

# of Months

 

Available Space as 3/31/03

 

 

 

 

 

 

 

814,961

 

 

 

 

 

 

 

 

 

 

 

Renewing Tenants

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

1

 

3.2

 

698

 

715

 

27.00

 

21.00

 

-

 

-

 

 

 

100 Park Avenue

 

1

 

2.4

 

1,663

 

2,413

 

40.00

 

38.00

 

-

 

2.0

 

 

 

110 East 42nd Street

 

1

 

1.0

 

594

 

785

 

32.50

 

32.48

 

-

 

-

 

 

 

1466 Broadway

 

4

 

3.0

 

2,590

 

3,667

 

36.47

 

35.91

 

1.15

 

4.5

 

 

 

Total/Weighted Average

 

7

 

2.6

 

5,545

 

7,580

 

36.29

 

34.82

 

0.56

 

1.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total/Weighted Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Relocating Tenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

1

 

3.4

 

561

 

824

 

42.00

 

48.59

 

7.92

 

-

 

 

 

1466 Broadway

 

1

 

3.9

 

1,946

 

2,614

 

39.00

 

34.91

 

2.62

 

-

 

 

 

420 Lexington Avenue

 

4

 

5.8

 

15,564

 

22,235

 

41.90

 

30.66

 

22.59

 

3.1

 

 

 

Total/Weighted Average

 

6

 

5.5

 

18,071

 

25,673

 

41.61

 

31.67

 

20.59

 

0.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Tenants Replacing Old Tenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

5

 

3.3

 

9,684

 

14,219

 

27.55

 

24.38

 

10.73

 

6.0

 

 

 

1370 Broadway

 

3

 

8.5

 

14,329

 

18,885

 

23.48

 

32.78

 

10.31

 

8.1

 

 

 

1 Park Avenue

 

2

 

7.9

 

100,490

 

117,500

 

41.61

 

41.39

 

23.22

 

13.8

 

 

 

180 Madison Avenue

 

3

 

4.6

 

6,200

 

7,816

 

37.34

 

21.84

 

31.63

 

8.0

 

 

 

286 Madison Avenue

 

1

 

3.0

 

2,034

 

2,906

 

30.00

 

25.78

 

5.00

 

-

 

 

 

1414 Sixth Avenue

 

1

 

5.0

 

1,567

 

2,382

 

36.00

 

44.02

 

7.33

 

2.0

 

 

 

1372 Broadway

 

1

 

10.6

 

8,749

 

11,362

 

28.00

 

23.13

 

23.71

 

6.5

 

 

 

711 Third Avenue

 

1

 

4.5

 

3,417

 

4,882

 

43.00

 

31.65

 

16.00

 

3.0

 

 

 

1466 Broadway

 

4

 

1.5

 

3,028

 

4,447

 

35.54

 

36.34

 

3.90

 

3.5

 

 

 

420 Lexington Avenue

 

6

 

5.1

 

11,971

 

18,969

 

35.17

 

39.53

 

13.84

 

18.1

 

 

 

Total/Weighted Average

 

27

 

7.0

 

161,469

 

203,368

 

37.09

 

36.92

 

19.58

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1372 Broadway

 

1

 

5.0

 

3,016

 

3,016

 

42.10

 

45.44

 

-

 

-

 

 

 

Total/Weighted Average

 

1

 

5.0

 

3,016

 

3,016

 

42.10

 

45.44

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

420 Lexington Avenue

 

1

 

1.8

 

52

 

74

 

25.00

 

12.00

 

-

 

-

 

 

 

Total/Weighted Average

 

1

 

1.8

 

52

 

74

 

25.00

 

12.00

 

-

 

-

 

 

30

FIRST QUARTER - 2003 LEASING ACTIVITY

 

Leased Space

 

 

Activity Type

 

Building Address

 

# of Leases

 

Term

(Yrs)

 

Usable SF

 

Rentable SF

 

New Cash Rent /

Rentable SF

 

Prev. Escalated Rent/

Rentable SF

 

T.I /

Rentable SF

 

Free Rent

# of Months

 

New Tenants Replacing Vacancies

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

317 Madison Avenue

 

2

 

8.2

 

7,297

 

10,419

 

35.41

 

-

 

43.8

 

7.0

 

 

 

220 East 42nd Street

 

3

 

10.2

 

5,438

 

7,718

 

44.00

 

-

 

40.2

 

3.0

 

 

 

440 Ninth Avenue

 

1

 

7.0

 

558

 

797

 

29.00

 

-

 

-

 

4.0

 

 

 

1466 Broadway

 

3

 

4.0

 

4,038

 

5,338

 

35.82

 

-

 

8.67

 

2.0

 

 

 

420 Lexington Avenue

 

3

 

6.8

 

9,567

 

14,819

 

36.11

 

-

 

36.04

 

10.0

 

 

 

Total/Weighted Average

 

12

 

7.4

 

26,898

 

39,091

 

38.05

 

-

 

34.46

 

1.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

420 Lexington

 

1

 

4.4

 

144

 

205

 

20.00

 

-

 

-

 

-

 

 

 

Total/Weighted Average

 

1

 

6.3

 

144

 

205

 

20.00

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leased Space

 

Office

 

 

 

52

 

6.8

 

211,983

 

275,712

 

37.62

 

36.28

 

21.22

 

4.1

 

Retail

 

 

 

1

 

5.0

 

3,016

 

3,016

 

42.10

 

45.44

 

-

 

-

 

Storage

 

 

 

2

 

5.1

 

196

 

279

 

21.33

 

3.18

 

-

 

-

 

 

 

Total

 

55

 

6.8

 

215,195

 

279,007

 

37.65

 

36.39

 

20.96

 

4.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold Vacancies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sub-Total Available Space @ 3/31/03

 

599,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holdover Tenants

 

 

 

317 Madison

 

1

 

0

 

546

 

702

 

30.00

 

30.00

 

-

 

-

 

 

 

1515 Broadway

 

1

 

0

 

640

 

640

 

20.00

 

20.00

 

-

 

-

 

 

 

1 Park Avenue

 

1

 

0

 

2,079

 

2,654

 

22.00

 

22.00

 

-

 

-

 

 

 

180 Madison Avenue

 

2

 

0

 

1,636

 

1,636

 

33.01

 

33.01

 

-

 

-

 

 

 

286 Madison Avenue

 

1

 

0

 

1,674

 

2,102

 

31.51

 

31.51

 

-

 

-

 

 

 

321 West 44th Street

 

1

 

0

 

3,794

 

4,548

 

12.93

 

20.00

 

-

 

-

 

 

 

1466 Broadway

 

7

 

0

 

6,743

 

8,455

 

32.90

 

32.90

 

-

 

-

 

 

 

420 Lexington Avenue

 

3

 

0

 

7,201

 

8,333

 

34.70

 

34.70

 

-

 

-

 

 

 

 

 

17

 

0

 

24,313

 

29,070

 

28.85

 

29.95

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Available Space @ 3/31/03

 

575,453

 

 

 

 

 

 

 

 

 

 

 

 

31

 

FIRST QUARTER - 2003 LEASING ACTIVITY

 

Leased Space

 

Activity Type

 

Building Address

 

# of Leases

 

Term

(Yrs)

 

Usable SF

 

Rentable SF

 

New Cash Rent /

Rentable SF

 

Prev. Escalated Rent/

Rentable SF

 

T.I /

Rentable SF

 

Free Rent

# of Months

 

Early Renewals

 

Office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

555 West 57th Street

 

1

 

5.0

 

22,214

 

31,766

 

29.00

 

23.69

 

5.00

 

-

 

 

 

70 West 36th Street

 

1

 

2.0

 

1,105

 

1,616

 

24.00

 

22.73

 

-

 

-

 

 

 

711 Third Avenue

 

1

 

1.0

 

2,727

 

3,864

 

31.00

 

28.27

 

-

 

-

 

 

 

1466 Broadway

 

1

 

2.8

 

2,041

 

2,830

 

38.00

 

40.83

 

5.00

 

-

 

 

 

420 Lexington

 

1

 

5.0

 

724

 

945

 

33.00

 

41.21

 

4.71

 

-

 

 

 

 

 

5

 

4.4

 

28,811

 

41,021

 

29.70

 

25.67

 

4.33

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70 West 36th Street

 

1

 

7.0

 

3,844

 

3,844

 

39.36

 

61.85

 

4.03

 

-

 

 

 

 

 

1

 

7.0

 

3,844

 

3,844

 

39.36

 

61.85

 

4.03

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70 West 36th Street

 

1

 

7.0

 

3,137

 

4,514

 

19.65

 

9.97

 

-

 

-

 

 

 

555 West 57th Street

 

1

 

5.0

 

2,017

 

2,915

 

15.00

 

15.00

 

-

 

-

 

 

 

 

 

2

 

6.6

 

5,154

 

7,429

 

23.05

 

16.88

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewals

 

 

 

Expired/Renewed Office

 

7

 

2.6

 

5,545

 

7,580

 

36.29

 

34.82

 

0.56

 

1.2

 

 

 

Early Renewals Office

 

5

 

4.4

 

28,811

 

41,021

 

29.70

 

25.67

 

4.33

 

-

 

 

 

Early Renewals Retail

 

1

 

7.0

 

3,844

 

3,844

 

39.36

 

61.85

 

4.03

 

-

 

 

 

Early Renewals Storage

 

2

 

6.6

 

5,154

 

7,429

 

23.05

 

16.88

 

-

 

-

 

 

 

Total

 

15

 

4.6

 

43,354

 

59,874

 

30.33

 

28.06

 

3.29

 

0.4

 

 

*      Annual Base Rent

**   Escalated Rent is calculated as Total Annual Income less Electric Charges.

 

32

 

ANNUAL LEASE EXPIRATIONS

 

Consolidated Properties

 

Year of Lease

Expiration

 

Number of

Expiring

Leases**

 

Square

Footage of

Expiring

Leases

 

Percentage of

Total Leased Sq.

Ft.

 

Annualized Rent

of Expiring

Leases  ($'s)

 

Annualized Rent Per

Leased Square Foot

of Expiring Leases

$/psf ***

 

Year 2003

Weighted Average

Asking Rent $/psf

 

In 1st  Quarter 2003*

 

32

 

63,280

 

0.79

%

$

1,908,732

 

$

30.16

 

$

35.76

 

In 2nd Quarter 2003

 

39

 

174,431

 

2.17

%

$

5,554,056

 

$

31.84

 

$

36.07

 

In 3rd Quarter 2003

 

33

 

93,879

 

1.17

%

$

3,781,596

 

$

40.28

 

$

36.03

 

In 4th Quarter 2003

 

36

 

252,498

 

3.14

%

$

6,768,984

 

$

26.81

 

$

31.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total 2003

 

140

 

584,088

 

7.27

%

$

18,013,368

 

$

30.84

 

$

34.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2004

 

143

 

635,235

 

7.91

%

$

21,132,420

 

$

33.27

 

$

32.66

 

2005

 

132

 

540,640

 

6.73

%

$

17,578,548

 

$

32.51

 

$

34.10

 

2006

 

84

 

553,043

 

6.88

%

$

17,134,752

 

$

30.98

 

$

33.24

 

2007

 

87

 

412,386

 

5.13

%

$

13,625,004

 

$

33.04

 

$

34.34

 

2008

 

55

 

497,744

 

6.19

%

$

15,361,260

 

$

30.86

 

$

33.09

 

2009

 

40

 

622,735

 

7.75

%

$

19,691,484

 

$

31.62

 

$

32.88

 

2010

 

54

 

1,517,465

 

18.89

%

$

47,810,688

 

$

31.51

 

$

34.21

 

2011

 

23

 

308,561

 

3.84

%

$

12,779,388

 

$

41.42

 

$

35.77

 

2012

 

26

 

807,936

 

10.06

%

$

18,185,796

 

$

22.51

 

$

28.26

 

Thereafter

 

50

 

1,554,788

 

19.35

%

$

47,766,515

 

$

30.72

 

$

34.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

834

 

8,034,621

 

100.00

%

$

249,079,223

 

$

31.00

 

$

33.35

 

 

*      Includes month to month holdover tenants that expired prior to 3/31/03.

**    Tenants may have multiple leases.

**    Represents current in place annualized rent allocated by year of maturity.

 

33

 

ANNUAL LEASE EXPIRATIONS

 

Joint Venture Properties

 

Year of Lease

Expiration

 

Number of

Expiring

Leases**

 

Square

Footage of

Expiring

Leases

 

Percentage of

Total Leased Sq.

Ft.

 

Annualized Rent

of Expiring

Leases  ($'s)

 

Annualized Rent Per

Leased Square Foot

of Expiring Leases

$/psf ***

 

Year 2003

Weighted Average

Asking Rent $/psf

 

In 1st  Quarter 2003*

 

5

 

93,501

 

2.17

%

$

2,302,056

 

$

24.62

 

$

35.13

 

In 2nd Quarter 2003

 

5

 

29,272

 

0.68

%

$

1,048,980

 

$

35.84

 

$

43.57

 

In 3rd Quarter 2003

 

8

 

35,685

 

0.83

%

$

1,030,440

 

$

28.88

 

$

35.59

 

In 4th Quarter 2003

 

9

 

45,389

 

1.05

%

$

2,703,888

 

$

59.57

 

$

41.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total 2003

 

27

 

203,847

 

4.72

%

$

7,085,364

 

$

34.76

 

$

39.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2004

 

18

 

152,999

 

3.54

%

$

6,500,796

 

$

42.49

 

$

41.01

 

2005

 

29

 

405,515

 

9.39

%

$

11,514,108

 

$

28.39

 

$

40.80

 

2006

 

25

 

366,612

 

8.49

%

$

10,339,968

 

$

28.20

 

$

37.14

 

2007

 

15

 

286,432

 

6.63

%

$

11,455,572

 

$

39.99

 

$

41.82

 

2008

 

16

 

342,212

 

7.93

%

$

11,175,600

 

$

32.66

 

$

40.77

 

2009

 

17

 

524,865

 

12.16

%

$

18,254,568

 

$

34.78

 

$

40.09

 

2010

 

15

 

1,329,504

 

30.80

%

$

53,809,476

 

$

40.47

 

$

44.71

 

2011

 

5

 

101,393

 

2.35

%

$

4,144,284

 

$

40.87

 

$

33.41

 

2012

 

7

 

202,403

 

4.69

%

$

3,738,636

 

$

18.47

 

$

36.59

 

Thereafter

 

11

 

401,384

 

9.30

%

$

13,289,198

 

$

33.03

 

$

40.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

185

 

4,317,166

 

100.00

%

$

151,307,570

 

$

35.05

 

$

41.06

 

 

*      Includes month to month holdover tenants that expired prior to 3/31/03

**    Tenants may have multiple leases.

***  Represents in place annualized rent allocated by year of maturity.

 

34

 

SUMMARY OF REAL ESTATE ACQUISITION ACTIVITY POST 1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property

 

Type of Ownership

 

Submarket

 

Net Rentable

s.f.

 

% Leased

at acquisition

 

% Leased

3/31/2003

 

Acquisition

Price ($'s)

 

1998 Acquisitions

 

Mar-98

 

420 Lexington

 

Operating Sublease

 

Grand Central North

 

1,188,000

 

83

 

95

 

$78,000,000

 

Mar-98

 

1466 Broadway

 

Fee Interest

 

Times Square

 

289,000

 

87

 

89

 

$64,000,000

 

Mar-98

 

321 West 44th

 

Fee Interest

 

Times Square

 

203,000

 

96

 

91

 

$17,000,000

 

May-98

 

711 3rd Avenue

 

Operating Sublease

 

Grand Central North

 

524,000

 

79

 

100

 

$65,600,000

 

Jun-98

 

440 9th Avenue

 

Fee Interest

 

Garment

 

339,000

 

76

 

93

 

$32,000,000

 

Aug-98

 

1412 Broadway

 

Fee Interest

 

Times Square South

 

389,000

 

90

 

N/A

 

$82,000,000

 

 

 

 

 

 

 

 

 

2,932,000

 

 

 

 

 

$338,600,000

 

1999 Acquisitions

 

Jan-99

 

420 Lexington Leasehold

 

Sub-leasehold

 

Grand Central North

 

 

 

 

 

-

 

$27,300,000

 

Jan-99

 

555 West 57th - 65% JV

 

Fee Interest

 

Midtown West

 

941,000

 

100

 

100

 

$66,700,000

 

May-99

 

90 Broad Street - 35% JV

 

Fee Interest

 

Financial

 

339,000

 

82

 

N/A

 

$34,500,000

 

May-99

 

The Madison Properties:

 

Fee Interest

 

Grand Central South

 

 

 

 

 

 

 

$50,000,000

 

 

 

286 Madison Avenue

 

 

 

 

 

112,000

 

99

 

95

 

 

 

 

 

290 Madison Avenue

 

 

 

 

 

36,800

 

86

 

100

 

 

 

 

 

292 Madison Avenue

 

 

 

 

 

187,000

 

97

 

95

 

 

 

Aug-99

 

1250 Broadway - 50% JV

 

Fee Interest

 

Penn Station

 

670,000

 

97

 

N/A

 

$93,000,000

 

Nov-99

 

555 West 57th - remaining 35%

 

Fee Interest

 

Midtown West

 

-

 

 

 

 

 

$34,100,000

 

 

 

 

 

 

 

 

 

2,285,800

 

 

 

 

 

$305,600,000

 

2000 Acquisitions

 

Feb-00

 

100 Park Avenue

 

Fee Interest

 

Grand Central South

 

834,000

 

97

 

98

 

$192,000,000

 

Dec-00

 

180 Madison Avenue

 

Fee Interest

 

Grand Central South

 

265,000

 

90

 

84

 

$41,250,000

 

Contribution to JV

 

May-00

 

321 West 44th

 

Fee Interest

 

Times Square

 

203,000

 

98

 

91

 

$28,400,000

 

 

 

 

 

 

 

 

 

1,302,000

 

 

 

 

 

$261,650,000

 

2001 Acquisitions

 

Jan-01

 

1370 Broadway

 

Fee Interest

 

Garment

 

255,000

 

97

 

95

 

$50,500,000

 

Jan-01

 

1 Park Avenue

 

Various Interests

 

Grand Central South

 

913,000

 

97

 

86

 

$233,900,000

 

Jan-01

 

469 7th Avenue - 35% JV

 

Fee Interest

 

Penn Station

 

253,000

 

98

 

N/A

 

$45,700,000

 

Jun-01

 

317 Madison

 

Fee Interest

 

Grand Central

 

450,000

 

95

 

96

 

$105,600,000

 

Acquisition of JV Interest

 

Sep-01

 

1250 Broadway - 49.9% JV (1)

 

Fee Interest

 

Penn Station

 

670,000

 

98

 

98

 

$126,500,000

 

 

 

 

 

 

 

 

 

2,541,000

 

 

 

 

 

$562,200,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2002 Acquisitions

 

May-02

 

1515 Broadway - 55% JV

 

Fee Interest

 

Times Square

 

1,750,000

 

98

 

97

 

$483,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$483,500,000

 

2003 Acquisitions

 

Feb-03

 

220 East 42nd Street

 

Fee Interest

 

United Nations

 

1,135,000

 

92

 

92

 

$265,000,000

 

Mar-03

 

125 Broad Street

 

Fee Interest

 

Downtown

 

525,000

 

100

 

100

 

$92,000,000

 

 

 

 

 

 

 

 

 

1,660,000

 

 

 

 

 

$357,000,000

 

 

(1)   Current ownership interest is 55%. (From 9/1/01-10/31/01the company owned 99.8% of this property.)

 

35

 

SUMMARY OF REAL ESTATE SALES ACTIVITY POST 1999

 

 

 

Property

 

Type of Ownership

 

Submarket

 

Net Rentable

s.f.

 

Sales

Price ($'s)

 

Sales

Price ($'s/SF)

 

2000 Sales

 

Feb-00

 

29 West 35th Street

 

Fee Structure

 

Garment

 

78,000

 

$11,700,000

 

$150

 

Mar-00

 

36 West 44th Street

 

Fee Structure

 

Grand Central

 

178,000

 

$31,500,000

 

$177

 

May-00

 

321 West 44th Street - 35 % JV

 

Fee Structure

 

Times Square

 

203,000

 

$28,400,000

 

$140

 

Nov-00

 

90 Broad Street

 

Fee Structure

 

Financial

 

339,000

 

$60,000,000

 

$177

 

Dec-00

 

17 Battery South

 

Fee Structure

 

Financial

 

392,000

 

$53,000,000

 

$135

 

 

 

 

 

 

 

 

 

1,190,000

 

$184,600,000

 

$156

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2001 Sales

 

Jan-01

 

633 Third Ave

 

Fee Structure

 

Grand Central North

 

40,623

 

$13,250,000

 

$326

 

May-01

 

1 Park Ave - 45% JV

 

Fee Structure

 

Times Square

 

913,000

 

$233,900,000

 

$256

 

Jun-01

 

1412 Broadway

 

Fee Structure

 

Times Square South

 

389,000

 

$90,700,000

 

$233

 

Jul-01

 

110 E. 42nd Street

 

Fee Structure

 

Grand Central North

 

69,700

 

$14,500,000

 

$208

 

Sep-01

 

1250 Broadway (1)

 

Fee Structure

 

Penn Station

 

670,000

 

$126,500,000

 

$189

 

 

 

 

 

 

 

 

 

2,082,323

 

$478,850,000

 

$242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2002 Sales

 

Jun-02

 

469 Seventh Avenue

 

Fee Structure

 

Penn Station

 

253,000

 

$53,100,000

 

$210

 

 

 

 

 

 

 

 

 

253,000

 

$53,100,000

 

$210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2003 Sales

 

Mar-03

 

50 West 23rd Street

 

Fee Structure

 

Chelsea

 

333,000

 

$66,000,000

 

$198

 

 

 

 

 

 

 

 

 

333,000

 

$66,000,000

 

$198

 

 

(1)   Company sold a 45% JV interest in the property at an implied $126.5mm sales price.

 

36

 

SUPPLEMENTAL DEFINITIONS

 

Annualized rent is calculated as monthly base rent and escalations per the lease, as of a certain date, multiplied by 12.

 

Debt service coverage is adjusted EBITDA divided by total interest and principal payments

 

Equity income/ (loss) from affiliates are generally accounted for on a cost basis and realized gains and losses are included in current earnings.  For its investments in private companies, the Company periodically reviews its investments and management determines if the value of such investments have been permanently impaired.  Permanent impairment losses for investments in public and private companies are included in current earnings.

 

Fixed charge is adjusted EBITDA divided by the total payments for ground leases and preferred stock.

 

Fixed charge coverage is adjusted EBITDA divided by total interest expense (including capitalized interest and debt premium amortization, but excluding finance cost amortization) plus preferred dividends and distributions.

 

Funds available for distribution (FAD) is defined as FFO plus non-real estate depreciation, 2% allowance for straight line credit loss, adjustment for straight line ground rent, non-cash deferred compensation, a pro-rata adjustment for FAD for SLG’s unconsolidated JV; less straight line rental income, free rent net of amortization, second cycle tenant improvement and leasing cost, and recurring building improvements.

 

Funds from operations (FFO) is defined as income from operations before minority interests, gains or losses from sales of real estate and extraordinary items plus real estate depreciation, an adjustment to derive SLG’s pro rata share of the FFO of unconsolidated joint ventures, and perpetual preferred stock dividends.  In accordance with NAREIT White Paper on FFO, SLG includes the effects of straight-line rents in FFO.

 

Interest coverage is adjusted EBITDA divided by total interest expense.

 

Junior Mortgage Participations are subordinate interests in first mortgages.

 

Mezzanine Debt Loans are loans secured by ownership interests.

 

Operating earnings per share reflects income before minority interests and gains (losses) from dispositions of real estate and impairment reserves on assets held for sale and operating properties less minority interests’ share of income and preferred stock dividends if anti-dilutive.

 

Percentage leased represents the total percentage of total rentable square feet owned, which is leased, including month-to-month leases, as of the date reported.  Space is considered leased when the tenant has either taken physical or economic occupancy.

 

Preferred Equity Investments are equity investments entitled to preferential returns that are senior to common equity.

 

Recurring capital expenditures represents non-incremental building improvements and leasing costs required to maintain current revenues.  Recurring capital expenditures do not include immediate building improvements that were taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard.”

 

Redevelopment costs are non-recurring capital expenditures incurred in order to improve buildings to SLG’s “operating standards.”  These building costs are taken into consideration during the underwriting for a given property’s acquisition.

 

Same-store NOI growth is the change in the NOI (excluding straight-line rents) of the same-store properties from the prior year reporting period to the current year reporting period.

 

Same-store properties include all properties that were owned during both the current and prior year reporting periods and excludes development properties prior to being stabilized for both the current and prior reporting period.

 

Second generation TI’s and LC’s are tenant improvements, lease commissions, and other leasing costs incurred during leasing of second generations space.  Costs incurred prior to leasing available square feet are not included until such space is leased.  Second generation space excludes square footage vacant at acquisition.

 

SLG’s share of total debt to market capitalization is calculated as SLG’s share of total debt divided by the sum of total debt plus market equity and preferred stock equity income redeemable shares.  SLG’s share of total debt includes total consolidated debt plus SLG’s pro rata share of the debt of unconsolidated joint ventures less than JV partners’ share of debt.  Market equity assumes conversion of all OP units into common stock.

 

Total square feet owned represents 100% of the square footage of properties either owned directly by SLG or in which SLG has a controlling interest (e.g. consolidated joint ventures).

 

37

 

CORPORATE GOVERNANCE

 

Stephen L. Green

Thomas E. Wirth

Chairman of the Board and CEO

Chief Financial Officer

Marc Holliday

Gerard Nocera

President

Executive VP, Director of Real Estate

Michael W. Reid

Andrew S. Levine

Chief Operating Officer

General Counsel and Secretary

 

 

 

 

 

 

 

 

ANALYST COVERAGE

 

Firm

 

Analyst

 

Phone

 

Email

 

AG Edwards

 

Dave Aubuchon

 

(314 955-5452)

 

aubuchond@agedwards.com

 

Corinthian Partners, LLC

 

Claus Hirsch

 

(212 287-1565)

 

cwhirsch@rcn.com

 

Credit Suisse First Boston

 

Larry Raiman

 

(212 538-2380)

 

lawrence.raiman@csfb.com

 

Deutsche Banc Alex. Brown

 

Louis W. Taylor

 

(212 469-4912)

 

louis.taylor@db.com

 

Goldman Sachs

 

David J. Kostin

 

(212 902-6781)

 

david.kostin@gs.com

 

Legg Mason Wood Walker, Inc.

 

David Fick

 

(410 454-5018)

 

dmfick@leggmason.com

 

Lehman Brothers, Inc.

 

David Shulman

 

(212 526-3413)

 

dshulman@lehman.com

 

J.P. Morgan Securities Inc.

 

Anthony Paolone

 

(212 622-6682)

 

anthony.paolone@jpmorgan.com

 

McDonald & Company

 

Anatole Pevnev

 

(216 263-4783)

 

apevnev@mcdinvest.com

 

Prudential Securities

 

James W. Sullivan

 

(212 778-2515)

 

jim_sullivan@prusec.com

 

Raymond James & Associates

 

Paul Puryear

 

(727 573-8607)

 

ppuryear@ecm.rjf.com

 

Salomon Smith Barney

 

Jonathan Litt

 

(212 816-0231)

 

jonathan.litt@ssmb.com

 

Wachovia Securities

 

Christopher Haley

 

(443 263-6773)

 

christopher.haley@wachovia.com

 

 

SL Green Realty Corp. is followed by the analyst(s) listed above. Please note that any opinions, estimates or forecasts regarding SL Green Realty Corp.’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of SL Green Realty Corp. or its management. SL Green Realty Corp. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

 

38