UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 23, 2006

SL GREEN REALTY CORP.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MARYLAND

(STATE OF INCORPORATION)

(212) 594-2700

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.                                          Results of Operations and Financial Condition

Following the issuance of a press release on October 23, 2006 announcing the Company’s results for the third quarter ended September 30, 2006, the Company intends to make available supplemental information regarding the Company’s operations that is too voluminous for a press release. The Company is attaching the press release as Exhibit 99.1 and the supplemental package as Exhibit 99.2 to this Current Report on Form 8-K.

The information (including exhibits 99.1 and 99.2) being furnished pursuant to this “Item 2.02 Results of Operations and Financial Condition” 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 and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

Item 7.01.                                          Regulation FD Disclosure

As discussed in Item 2.02 above, on October 23, 2006, the Company issued a press release announcing its results for the third quarter ended September 30, 2006.

The information being furnished pursuant to this “Item 7.01 Regulation FD Disclosure” 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 and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing. This information will not be deemed an admission as to the materiality of such information that is required to be disclosed solely by Regulation FD.

Item 8.01.                                          Other Events

SL Green announced that it had made an investment in 717 Fifth Avenue which is evidenced by loans totaling $46.0 million and an option to acquire up to 33% of the ownership interests in the property.

SL Green announced that it had made an investment in 720 Fifth Avenue which is evidenced by a $35.0 million loan and a 25% interest in the cash flow from the property, together with an option to acquire a 25% ownership interest at loan maturity.

SL Green also announced today that its venture with Sutton had entered into a major lease with Apple Computer Inc. at its West 34^th Street redevelopment project.

The Company also announced that due to the achievement of certain performance hurdles, its economic interest in  1250 Broadway Realty Corp. had increased from 55.0% to 67.5%.

A copy of the press releases announcing these transactions are attached hereto as Exhibits 99.3 and 99.4 and are incorporated herein by reference.

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Item 9.01.                                          Financial Statements and Exhibits

(c)                                  Exhibits

99.1                           Press Release regarding third quarter earnings.

99.2                           Supplemental package.

99.3                           Press release regarding retail investments and leasing activity.

99.4                           Press release regarding increased economic ownership in 1250 Broadway.

NON-GAAP Supplemental Financial Measures

Funds from Operations (FFO)

FFO is a widely recognized measure of REIT performance. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or 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 we do. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002 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 present FFO because we consider it an important supplemental measure of our operating performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITS, particularly those that own and operate commercial office properties. We also use FFO as one of several criteria to determine performance-based bonuses for members of our senior management. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs, providing perspective not immediately apparent from net income. 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 finance 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

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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.

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, 2005, 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 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).

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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.

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Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT

Gregory F. Hughes

Chief Financial Officer

(212) 594-2700

or

Heidi Gillette

Investor Relations

(212) 216-1601

SL GREEN REALTY CORP. REPORTS

THIRD QUARTER FFO OF $1.13 PER SHARE

Third Quarter Highlights

•                  Entered into a definitive agreement to acquire Reckson Associates Realty Corp. (NYSE: RA) for approximately $6.0 billion. Simultaneously entered into an agreement to sell approximately $2.1 billion of Reckson assets. Acquisition includes 5 Manhattan properties totaling approximately 4.2 million square feet.

•                  Increased average office starting rents by 25.8% over previously fully escalated rents reflecting continued growth in rents for office leases signed during the third quarter.

•                  Signed 56 office leases totaling 586,000 square feet during the third quarter.

•                  Finished the quarter at 96.1% occupancy, up from 95.9% at the end of the second quarter.

•                  Recognized combined same-store GAAP NOI growth of 7.5% during the third quarter.

•                  Closed on previously announced sales of 286 and 290 Madison Avenue and 1140 Avenue of the Americas which generated gains on sale of $94.6 million, or $2.02 per share.

•                  Formed Belmont Insurance Company, an insurance captive to have the ability to self-insure certain risks of SL Green.

•                  Originated $32.5 million of structured finance investments with an initial yield of 11.69%.

•                  Received $9.5 million in dividends and fees from our investment in, and management arrangements with, Gramercy (NYSE: GKK), including a $1.8 million incentive fee earned during the quarter.

•                  FFO for the nine months ended September 30, 2006 was $3.42 per share, an 8.9% increase over the same period in 2005, which was $3.14 per share. FFO for the third quarter ended September 30, 2006 was the same as for the same quarter in 2005, but was 35.8% higher when excluding a $10.8 million incentive fee earned in the third quarter of 2005.

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Summary

New York, NY, October 23, 2006 - SL Green Realty Corp. (NYSE:  SLG) today reported funds from operations available to common stockholders, or FFO, of $55.5 million, or $1.13 per share, for the third quarter ended September 30, 2006, consistent with the same quarter in 2005. The results for 2005 included an incentive fee of $10.8 million ($0.24 per share). Excluding the incentive fee, FFO for the quarter ended September 30, 2006 would have increased approximately 35.8% over the same quarter in 2005. The Company also reported FFO of $3.42 per share for the nine months ended September 30, 2006, an 8.9% increase over the same period in 2005, which was $3.14 per share.

Net income available to common stockholders totaled $118.7 million, or $2.53 per share for the third quarter and $171.5 million, or $3.78 per share for the nine months ended September 30, 2006, an increase of $81.4 million and $54.8 million over the respective periods in 2005. 2006 year-to-date results include gains on sale of $2.08 per share compared to gains on sale of $1.04 per share in 2005.

All per share amounts are presented on a diluted basis.

Operating and Leasing Activity

For the third quarter of 2006, the Company reported revenues and EBITDA of $138.4 million and $75.3 million, respectively, increases of $22.8 million (or 19.7%) and $6.6 million (or 9.6%), respectively, over the same period in 2005, largely due to strong leasing activity at 625 Madison Avenue and 750 Third Avenue as well as the acquisitions in 2005 and 2006, including 28 West 44^th Street (February 2005), an additional interest in 19 West 44^th Street (June 2005), 521 Fifth Avenue (March 2006), 609 Fifth Avenue (June 2006) and an investment in 717 Fifth Avenue (September 2006). Same-store GAAP NOI on a combined basis increased by 7.5% for the third quarter when compared to the same quarter in 2005, with the wholly-owned properties increasing 11.1% to $45.3 million during the third quarter and the joint venture properties increasing by 1.5% to $24.9 million.

Average starting office rents of $62.67 per rentable square foot for the third quarter represented a 25.8% increase over the previously fully escalated rents.

Occupancy for the portfolio increased from 95.9% at June 30, 2006 to 96.1% at September 30, 2006. During the quarter, the Company signed 62 leases totaling 649,000 square feet, with 56 leases and 586,000 square feet representing office leases.

Significant leasing activities during the third quarter included:

•                  Expansion and renewal with Morgan Stanley and Co., Inc. for approximately 214,136 square feet at 1221 Avenue of the Americas.

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•                  New lease with Equinox for approximately 52,120 square feet at One Park Avenue.

•                  Commencement of lease with Allen and Overy for approximately 45,295 square feet at 1221 Avenue of the Americas.

•                  Expansion with Viacom International for approximately 34,563 square feet at 1515 Broadway.

•                  Expansion and renewal with Paychex of NY for approximately 24,600 square feet at 1250 Broadway.

Real Estate Investment Activity

During the third quarter of 2006, the Company announced new investments totaling approximately $6.2 billion.

Investment activity announced during the third quarter included:

•                  In August 2006, the Company announced that it had entered into an agreement to acquire Reckson Associates Realty Corp. for approximately $6.0 billion. The transaction includes the acquisition of thirty properties encompassing approximately 9.2 million square feet, of which 5 properties encompassing approximately 4.2 million square feet are located in Manhattan. The transaction, which is subject to approval by the Reckson shareholders as well as customary closing conditions, is scheduled to close in the first quarter of 2007. Simultaneously, the Company also announced that it had entered into an agreement to sell approximately $2.1 billion of the Reckson assets to an asset purchasing venture which includes certain members of Reckson’s senior management as well as Marathon Asset Management LLC. Additional details on the transaction can be found in the Registration Statement filed on Form S-4 which was declared effective by the Securities and Exchange Commission in October 2006.

•                  During the third quarter of 2006, SL Green also closed on the previously announced sales of 286 Madison Avenue, 290 Madison Avenue and 1140 Avenue of the Americas. The properties, which encompass approximately 340,000 square feet, were sold for an aggregate of $160.5 million. These asset sales generated gains of approximately $94.6 million, or $2.02 per share.

Financing and Capital Activity

In July 2006, the Company sold 2.5 million shares of its common stock for net proceeds, after deducting underwriting discounts, commissions and transaction expenses, of approximately $268.5 million.

In anticipation of the closing of the Reckson acquisition, the Company has received approximately $2.1 billion of financing commitments. The Company entered into a $150.0 million forward-starting swap in order to reduce the Company’s exposure to floating rate debt upon consummation of the Reckson transaction. The balance of the purchase price is expected to be funded through the issuance of approximately 9 million shares of SL Green common stock, and the assumption of Reckson’s existing debt.

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In October 2006, the Company formed Belmont Insurance Company, an insurance captive. The captive, which received licensing from the New York State Insurance Department, was formed to insure a portion of certain risks of SL Green. It is currently licensed to write up to $100 million of coverage for SL Green.

Green Loan Services LLC (GLS), an affiliate of SL Green Realty Corp., has been designated a Special Servicer by Standard & Poor’s. Established in 2005 to serve as the Special Servicer for Gramercy Real Estate CDO 2005-1 Ltd., the first CDO issued by Gramercy Capital Corp. (NYSE: GKK), GLS services owned-loan portfolios acquired through SL Green’s and Gramercy’s structured finance businesses, and also provides servicing work emanating from SL Green’s third-party investor relationships. In addition, GLS acts as the Special Servicer for six large CMBS loans secured by Manhattan office properties in which SL Green owns the B notes.

Structured Finance Activity

The Company’s structured finance investments totaled $347.6 million on September 30, 2006, an increase of $13.6 million over the balance at June 30, 2006. The structured finance investments currently have a weighted average maturity of 6.9 years. The weighted average yield for the quarter ended September 30, 2006 was 10.32%, consistent with the yield for the quarter ended June 30, 2006.

During the third quarter 2006, the Company originated $32.5 million of structured finance investments with an initial yield of 11.69%. In addition, the Company received redemptions totaling approximately $19.2 million that were yielding 10.97%.

Investment In Gramercy Capital Corp.

At September 30, 2006, the book value of the Company’s investment in Gramercy totaled $117.2 million. Fees earned from various arrangements between the Company and Gramercy totaled approximately $6.2 million for the quarter ended September 30, 2006, including an incentive fee of $1.8 million earned as a result of Gramercy’s FFO (as defined in the organizational documents of Gramercy) exceeding the 9.5% annual return on equity performance threshold. For the nine months ended September 30, 2006, the Company earned $16.4 million in fees from Gramercy. The Company’s share of FFO generated from its investment in Gramercy totaled approximately $4.1 million and $11.0 million for the three and nine months ended September 30, 2006, respectively, compared to $2.6 million and $5.9 million for the same periods in the prior year.

The Company’s marketing, general and administrative, or MG&A, expenses include the consolidation of the expenses of its subsidiary GKK Manager LLC, the entity which manages and advises Gramercy. For the quarter ended September 30, 2006, the Company’s MG&A includes approximately $2.2 million of costs associated with Gramercy. MG&A for this quarter also includes approximately $0.4 million of expense associated with the Company’s 2006 outperformance plan.

Dividends

During the third quarter of 2006, the Company declared quarterly dividends on its outstanding common and preferred stock as follows:

•                  $0.60 per share of common stock. Dividends were paid on October 13, 2006 to stockholders of record on the close of business on September 29, 2006.

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•                  $0.4766 and $0.4922 per share on the Company’s Series C and D Preferred Stock, respectively, for the period July 15, 2006 through and including October 14, 2006. Distributions were made on October 13, 2006 to stockholders of record on the close of business on September 29, 2006. Distributions reflect regular quarterly distributions, which are the equivalent of an annualized distribution of $1.90625 and $1.96875, respectively.

Management

SL Green also announced that Chief Operating Officer Gerard T. Nocera is leaving the Company, effective November 30, 2006.

Mr. Nocera has been with the SL Green organization since 1991 — serving as Executive Vice President-Director of Leasing  with SL Green Properties until 1997, and then with SL Green Realty Corp. until 2004 when he was named COO. In his most recent position, he has overseen all redevelopment projects and leasing programs during a period in which the Company has successfully acquired, repositioned and leased up a substantial number of properties and has grown rapidly.

Marc Holliday, President & CEO commented, “Gerry Nocera was here from the start of SL Green’s rise to the top of the New York City office market. He made a great many key contributions to the Company’s growth and financial success over the years. We are grateful to Gerry for what he has done and we wish him great success in his future endeavors.”

Mr. Nocera’s responsibilities will be assumed by members of the Company’s senior management team until a successor is named.

Conference Call and Audio Webcast

The Company’s executive management team, led by Marc Holliday, President and Chief Executive Officer, will host a conference call and audio web cast on Tuesday, October 24, 2006 at 2:00 p.m. ET to discuss third quarter financial results. The conference call may be accessed by dialing (866) 825-1692 Domestic or (617) 213-8059 International. No pass code is required. The live conference will be simultaneously broadcast in a listen-only mode on the Company’s web site at www.slgreen.com.

A replay of the call will be available through Tuesday, October 31, 2006 by dialing (888) 286-8010 Domestic or (617) 801-6888 International, using pass code 64785608.

Supplemental Information

The Supplemental Package outlining third quarter 2006 financial results will be available prior to the quarterly conference call on the Company’s website.

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Company Profile

SL Green Realty Corp. is a self-administered and self-managed real estate investment trust, or REIT, that predominantly acquires, owns, repositions and manages a portfolio of Manhattan office properties. The Company is the only publicly held REIT that specializes exclusively in this niche. As of September 30, 2006, the Company owned 27 office properties totaling 18.4 million square feet. The Company’s retail space ownership totals approximately 300,000 square feet at eight properties.

To be added to the Company’s distribution list or to obtain the latest news releases and other Company information, please visit our website at www.slgreen.com or contact Investor Relations at 212-216-1601.

Disclaimers

Non-GAAP Financial Measures

During the quarterly 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. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure (net income) can be found on pages 7 and 9 of this release and in the Company’s Supplemental Package.

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, 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.

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SL GREEN REALTY CORP.

STATEMENTS OF OPERATIONS-UNAUDITED

(Amounts in thousands, except per share data)

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SL GREEN REALTY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands)

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SL GREEN REALTY CORP.

SELECTED OPERATING DATA-UNAUDITED

(1) Includes wholly owned and joint venture properties.

SL GREEN REALTY CORP.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES*

(Amounts in thousands, except per share data)

*  See page 7 for a reconciliation of FFO and EBITDA to net income.

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Exhibit 99.2

SL Green Realty Corp.

Third Quarter 2006

Supplemental Data

September 30, 2006

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

•                  SL Green’s common stock is listed on the New York Stock Exchange, and trades under the symbol SLG.

•                  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 Investor Relations at investor.relations@slgreen.com or at 212-216-1601.

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 quarter ended September 30, 2006 that will subsequently be released on Form 10-Q to be filed on or before November 9, 2006.

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TABLE OF CONTENTS

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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. For more than 25 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. With the formation of Gramercy Capital Corp., or Gramercy, (NYSE: GKK) in 2004, there will be a reduced focus on direct structured finance investments by the Company. 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, or 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.

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FINANCIAL RESULTS

Funds From Operations, or FFO, available to common stockholders totaled $55.5 million, or $1.13 per share for the third quarter ended September 30, 2006, consistent with the same quarter in 2005 when FFO totaled $51.7 million, or $1.13 per share. The results for 2005 include an incentive fee of $10.8 million ($0.24 per share). Excluding the incentive fee, FFO for the quarter ended September 30, 2006 would have increased approximately 35.8% over the same quarter in 2005.

Net income available for common stockholders totaled $118.7 million, or $2.53 per share (diluted) for the third quarter ended September 30, 2006. Net income available to common stockholders totaled $37.3 million, or $0.87 per share in the same quarter in 2005. 2006 year-to-date results include gains on sale of $2.08 per share compared to gains on sale of $1.04 per share in 2005.

Funds available for distribution, or FAD, for the third quarter 2006 decreased to $0.81 per share (diluted) versus $0.83 per share (diluted) in the prior year, a 2.4% decrease.

The Company’s dividend payout ratio was 53.16% of FFO and 73.75% of FAD before third cycle leasing costs.

All per share amounts are presented on a diluted basis.

CONSOLIDATED RESULTS

Total quarterly revenues increased 19.7% in the third quarter to $138.4 million compared to $115.6 million in the prior year. The $22.8 million growth in revenue resulted primarily from the following items:

•                  $12.1 million increase from 2006 and 2005 acquisitions,

•                  $11.9 million increase from same-store properties,

•                  $5.1 million increase in preferred equity and investment income, and

•                  $6.3 million decrease in other revenue, which was primarily due to an incentive fee earned in 2005 ($10.8 million) which was partially offset by fees earned from Gramercy ($2.6 million).

The Company’s earnings before interest, taxes, depreciation and amortization, or EBITDA, increased by $6.6 million (9.6%) to $75.3 million. The following items drove EBITDA improvements:

•                  $8.2 million increase from 2006 and 2005 acquisitions.

•                  $4.4 million increase from same-store properties.

•                  $5.1 million increase in preferred equity and investment income. The weighted-average structured finance investment balance for the quarter decreased to $351.3 million from $413.6 million in the prior year. The weighted-average yield for the quarter was 10.32% compared to 10.27% in the prior year.

•                  $3.6 million decrease from reductions in equity in net income from unconsolidated joint ventures primarily due to

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our investments at 1515 Broadway ($3.0 million), 1221 Avenue of the Americas ($2.1 million) and the Mack-Green joint venture ($2.1 million). This was partially offset by increases at Gramercy ($1.5 million), 485 Lexington Avenue ($0.7 million), 100 Park Avenue ($0.8 million) and One Park Avenue ($0.4 million).

•                  $1.0 million decrease from higher MG&A expense. This is primarily due to higher compensation costs at GKK Manager LLC, which is consolidated into the accounts of SL Green.

•                  $6.5 million decrease in non-real estate revenues net of expenses, primarily due to an incentive fee earned in 2005 ($10.8 million) which was partially offset by fee income from Gramercy ($2.6 million).

FFO before minority interests improved $3.8 million primarily as a result of:

•                  $6.6 million increase in EBITDA,

•                  $0.6 million decrease in FFO from unconsolidated joint ventures, discontinued operations and non-real estate depreciation, and

•                  $3.4 million decrease from higher interest expense.

SAME-STORE RESULTS

Consolidated Properties

Same-store third quarter 2006 GAAP NOI increased $4.5 million (11.1%) to $45.3 million compared to the prior year. Operating margins after ground rent increased from 46.7% to 47.6%.

The $4.5 million increase in GAAP NOI was primarily due to:

•                  $4.8 million (6.7%) increase in rental revenue primarily due to improved leasing,

•                  $2.7 million (19.3%) increase in escalation and reimbursement revenue primarily due to operating expense and real estate tax recoveries,

•                  $0.6 million (62.4%) increase in investment and other income,

•                  $2.8 million (11.3%) increase in operating expenses, primarily driven by increases in payroll, utilities and insurance costs, and

•                  $0.8 million (4.9%) increase in real estate taxes.

Joint Venture Properties

The Joint Venture properties third quarter 2006 GAAP NOI increased $0.4 million (1.5%) to $24.9 million compared to the prior year. Operating margins after ground rent decreased from 56.9% to 55.8%.

The $0.4 million increase in GAAP NOI was primarily due to:

•                  $0.7 million (2.1%) increase in rental revenue primarily due to improved leasing,

•                  $1.2 million (16.4%) increase in escalation and reimbursement revenue primarily due to electric

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reimbursements and real estate tax and operating expense recoveries,

•                  $0.3 million (11.7%) decrease in other income,

•                  $0.4 million (7.5 %) increase in real estate taxes, and

•                  $0.8 million (6.3%) increase in operating expenses primarily driven by increases in utilities and insurance.

STRUCTURED FINANCE ACTIVITY

As of September 30, 2006, our structured finance and preferred equity investments totaled $347.6 million. The weighted average balance outstanding for the third quarter of 2006 was $351.3 million. During the third quarter of 2006 the weighted average yield was 10.32%.

During the third quarter 2006, the Company originated $32.5 million of structured finance investments with an initial yield of 11.69%. In addition, the Company received redemptions totaling approximately $19.2 million that were yielding 10.97%.

QUARTERLY LEASING HIGHLIGHTS

Vacancy at June 30, 2006 was 778,228 useable square feet net of holdover tenants. During the quarter, 337,061 additional useable office, retail and storage square feet became available at an average escalated cash rent of $44.86 per rentable square foot. The Company sold 2,725 of available usable square feet in connection with the closing of the 1140 Avenue of the Americas transaction. Space available to lease during the quarter totaled 1,112,564 useable square feet, or 6.0% of the total portfolio.

During the third quarter, 56 office leases, including early renewals, were signed totaling 586,223 rentable square feet. New cash rents averaged $62.67 per rentable square foot. Replacement rents were 25.8% higher than rents on previously occupied space, which had fully escalated cash rents averaging $49.81 per rentable square foot. The average lease term was 6.4 years and average tenant concessions were 1.9 months of free rent with a tenant improvement allowance of $14.90 per rentable square foot.

The Company also signed 6 retail and storage leases, including early renewals, for 62,273 rentable square feet. The average lease term was 14.7 years and the average tenant concessions were 5.4 months of free rent with a tenant improvement allowance of $31.73 per rentable square foot.

REAL ESTATE ACTIVITY

Real estate investment transactions entered into during the third quarter totaled approximately $6.2 billion and included:

•                  In August 2006, the Company announced that it had entered into an agreement to acquire Reckson Associates Realty Corp. (NYSE: RA) for approximately $6.0 billion. The transaction includes the acquisition of thirty properties encompassing approximately 9.2 million square feet, of which 5

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properties encompassing approximately 4.2 million square feet are located in Manhattan. The transaction, which is subject to approval by the Reckson shareholders as well as customary closing conditions, is scheduled to close in the first quarter of 2007. Simultaneously, the Company also announced that it had entered into an agreement to sell approximately $2.1 billion of the Reckson assets to an asset purchasing venture which includes certain members of Reckson’s senior management as well as Marathon Asset Management LLC. Additional details on the transaction can be found in the Registration Statement filed on Form S-4 which was declared effective by the Securities and Exchange Commission in October 2006.

•                  During the third quarter of 2006, SL Green also closed on the previously announced sales of 286 Madison Avenue, 290 Madison Avenue and 1140 Avenue of the Americas. The properties, which encompass approximately 340,000 square feet, were sold for an aggregate of $160.5 million. These asset sales generated gains of approximately $94.6 million, or $2.02 per share.

Investment In Gramercy Capital Corp.

At September 30, 2006, the book value of the Company’s investment in Gramercy totaled $117.2 million. Fees earned from various arrangements between the Company and Gramercy totaled approximately $6.2 million for the quarter ended September 30, 2006, including an incentive fee of $1.8 million earned as a result of Gramercy’s FFO (as defined in the organizational documents of Gramercy) exceeding the 9.5% annual return on equity performance threshold. For the nine months ended September 30, 2006, the Company earned $16.4 million in fees from Gramercy. The Company’s share of FFO generated from its investment in Gramercy totaled approximately $4.1 million and $11.0 million for the three and nine months ended September 30, 2006, respectively, compared to $2.6 million and $5.9 million for the same periods in the prior year.

The Company’s marketing, general and administrative, or MG&A, expenses include the consolidation of the expenses of its subsidiary GKK Manager LLC, the entity which manages and advises Gramercy. For the quarter ended September 30, 2006, the Company’s MG&A includes approximately $2.2 million of costs associated with Gramercy. MG&A for this quarter also includes approximately $0.4 million of expense associated with the Company’s 2006 outperformance plan.

Financing/ Capital Activity

In July 2006, the Company sold 2.5 million shares of its common stock for net proceeds, after deducting underwriting discounts, commissions and transaction expenses, of approximately $268.5 million.

In anticipation of the closing of the Reckson acquisition, the Company has received approximately $2.1 billion of financing commitments. The Company entered into a $150.0 million

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forward-starting swap in order to reduce the Company’s exposure to floating rate debt upon consummation of the Reckson transaction. The balance of the purchase price is expected to be funded through the issuance of approximately 9 million shares of SL Green common stock, and the assumption of Reckson’s existing debt.

In October 2006, the Company formed Belmont Insurance Company, an insurance captive. The captive, which received licensing from the New York State Insurance Department, was formed to insure a portion of certain risks of SL Green. It is currently licensed to write up to $100 million of coverage for SL Green.

Green Loan Services LLC (GLS), an affiliate of SL Green Realty Corp. has been designated a Special Servicer by Standard & Poor’s. Established in 2005 to serve as the Special Servicer for Gramercy Real Estate CDO 2005-1 Ltd., the first CDO issued by Gramercy Capital Corp., GLS services owned-loan portfolios acquired through SL Green’s and Gramercy’s structured finance businesses, and also provides servicing work emanating from SL Green’s third-party investor relationships. In addition, GLS acts as the Special Servicer for six large CMBS loans secured by Manhattan office properties in which SL Green owns the B notes.

Dividends

On September 21, 2006, the Company declared a dividend of $0.60 per common share for the third quarter 2006. The dividend was payable October 13, 2006 to stockholders of record on the close of business on September 29, 2006. This distribution reflects the regular quarterly dividend, which is the equivalent of an annualized distribution of $2.40 per common share.

On September 21, 2006, the Company also approved a distribution on its Series C preferred stock for the period July 15, 2006 through and including October 14, 2006, of $0.4766 per share, payable October 13, 2006 to stockholders of record on the close of business on September 29, 2006. The distribution reflects the regular quarterly distribution, which is the equivalent of an annualized distribution of $1.90625 per Series C preferred stock.

On September 21, 2006, the Company also approved a distribution on its Series D preferred stock for the period July 15, 2006 through and including October 14, 2006, of $0.4922 per share, payable October 13, 2006 to stockholders of record on the close of business on September 29, 2006. The distribution reflects the regular quarterly distribution, which is the equivalent of an annualized distribution of $1.96875 per Series D preferred stock.

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