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):

April 23, 2007

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 April 23, 2007 announcing the Company’s results for the first quarter ended March 31, 2007, 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 Company announced that it is increasing its earnings guidance for the year ending December 31, 2007 to $5.40 per share of FFO.

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 April 23, 2007, the Company issued a press release announcing its results for the first quarter ended March 31, 2007.

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

On April 24, 2007, SL Green Realty Corp. announced that it has acquired a 32.26% interest in the office condominium located at 1745 Broadway in Midtown Manhattan.  The investment was made through a joint venture with SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, and The Witkoff Group. The interest was acquired for approximately $65.0 million, valuing the office space at approximately $520.0 million.

On April 24, 2007, SL Green Realty Corp. announced that it entered into an agreement to sell its office condominium interest in floors six through eighteen at 110 East 42nd Street for $111.5 million. The sale, which is subject to customary closing conditions, is expected to close during the second quarter of 2007.

On April 24, 2007, SL Green Realty Corp. announced that it entered into an agreement to sell its property located at 292 Madison Avenue for $140.0 million. The sale, which is subject to customary closing conditions, is expected to close during the second quarter of 2007.

On April 24, 2007, SL Green Realty Corp. announced that it has entered into an agreement to acquire the fee interest in 333 West 34th Street for $183.0 million from Citigroup Global Markets, Inc. The acquisition, which is subject to customary closing conditions, is expected to close during the second quarter of 2007.

On April 24, 2007, SL Green Realty Corp. announced that it has acquired 1 Jericho Plaza and 2 Jericho Plaza in Jericho, New York in a partnership with Onyx Equities and an affiliate of Credit Suisse, for $210 million.

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On April 14, 2007, SL Green announced that the joint venture that owns the property located at 1604-1610 Broadway put in place a 5-year, $27.0 million mortgage which bears interest at a fixed rate of 5.66% per annum. The mortgage is interest only for the first three years.  In connection with this refinancing, the Company’s economic interest increased from 45% to 63%.

2007 Earnings Guidance

The Company announced that it is increasing its earnings guidance for the year ending December 31, 2007 to $5.40 per share of FFO.

Copies of these press releases announcing these transactions are attached hereto as Exhibits 99.3 through 99.8 and are incorporated herein by reference.

Item 9.01.              Financial Statements and Exhibits

(c)           Exhibits

99.1                           Press Release regarding first quarter earnings.

99.2                           Supplemental package.

99.3                           Press release regarding the investment in 1745 Broadway.

99.4                           Press release regarding sale of 110 East 42nd Street.

99.5                           Press release regarding sale of 292 Madison Avenue.

99.6                           Press release regarding the investment in 333 West 34th Street.

99.7                           Press release regarding the investment in 1 Jericho Plaza and 2 Jericho Plaza.

99.8                           Press release regarding the recapitalization of 1604 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.

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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 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, 2006 and still owned at the end of the quarter, 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.

	SL GREEN REALTY CORP.
	/S/ Gregory F. Hughes
	Gregory F. Hughes
	Chief Financial Officer

 

Date:  April 24, 2007

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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

FIRST QUARTER FFO OF $2.03 PER SHARE

 

First Quarter Highlights

·                  Increased first quarter FFO to $2.03 per share (diluted) from $1.08 during the first quarter of 2006, an increase of 88.0%.

·                  Net income available to common stockholders in the first quarter of 2007 totaled $2.53 per share (diluted).

·                  Closed on acquisition of Reckson Associates Realty Corp. for approximately $4.0 billion, net of the assets sold to RexCorp. for approximately $2.0 billion.

·                  Closed on the sale of One Park for $550.0 million and realized a $77.2 million incentive distribution and gain on sale of approximately $31.5 million.

·                  Issued $750.0 million of 3.0% exchangeable senior notes due 2027.  The initial exchange price represents a 25% premium to the closing price of our common stock on March 20, 2007 of $138.64.

·                  Increased average Manhattan office starting rents by 37.0% over previously fully escalated rents reflecting continued growth in rents for Manhattan office leases signed during the first quarter.  Increased average Suburban office starting rents by 11.2% over previously fully escalated rents for Suburban office leases signed during the first quarter.

·                  Recognized combined same-store GAAP NOI growth of 5.8% during the first quarter.

·                  Acquired 331 Madison Avenue and 48 East 43rd Street for approximately $73.0 million.

·                  Entered into an agreement to sell 125 Broad Street for $273.0 million and in a related transaction agreed to acquire 500 West Putnam Avenue, Greenwich, CT for $56.0 million.

·                  Closed on the sale of 70 West 36th Street for $61.5 million, recognizing a gain of approximately $47.2 million.

·                  Closed on the acquisitions of 300 Main Street, Stamford, CT, and 399 Knollwood Road, White Plains, NY, for approximately $46.6 million.

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·                  Signed 57 Manhattan leases totaling 409,748 square feet during the first quarter.

·                  Finished the quarter at 97.3% occupancy for the Manhattan portfolio.

·                  Repaid and terminated $325.0 million unsecured term loan and announced our intention to redeem $200 million of senior unsecured notes assumed in connection with the Reckson transaction.  These redemptions and repayments included one time charges of approximately $4.1 million for exit fees, make-whole provisions and the write off of deferred financing costs.

·                  Implemented a $300.0 million stock repurchase plan and acquired 16,000 shares of its common stock in April 2007 at an average share price of $132.48.

·                  Originated $448.3 million of structured finance investments during the quarter, including $351.9 million originated and assumed in connection with the Reckson acquisition, $200.0 million of which was subsequently syndicated.

·                  Received $11.3 million in dividends and fees from our investment in, and management arrangements with, Gramercy, including a $2.8 million incentive fee earned during the quarter.

·                  Entered into 9 new employment agreements to upgrade the organizational structure, to reflect the Company’s recent growth, reward accomplishments of its leadership team and retain the team that has achieved industry leading results.  The first quarter includes a one time charge associated with the contracts of approximately $13.0 million.

Summary

New York, NY, April 23, 2007 - SL Green Realty Corp. (NYSE:  SLG) today reported funds from operations available to common stockholders, or FFO, of $123.7 million, or $2.03 per share, for the first quarter ended March 31, 2007, an 88.0% increase over the same quarter in 2006.  The 2007 results include an incentive distribution of $77.2 million from the sale of One Park Avenue.

Net income available to common stockholders totaled $147.4 million, or $2.53 per share, for the first quarter, an increase of $123.7 million over the respective period in 2006.  The first quarter 2007 results include gains on sale of $1.29 per share compared to no gain on sale in 2006.

All per share amounts are presented on a diluted basis.

Operating and Leasing Activity

For the first quarter of 2007, the Company reported revenues and EBITDA of $295.8 million and $182.8 million, respectively, increases of $179.4 million, or 154.2%, and $119.9 million, or 190.5%, respectively, over the same period in 2006, largely due to strong leasing activity at 673 First Avenue, 28 West 44th Street and 1372 Broadway as well as 2007 acquisitions, including the Reckson acquisition.  Same-store GAAP NOI on a combined basis increased by 5.8% for the first quarter when compared to the same quarter in 2006, with the wholly-owned properties increasing 7.9% to $51.0 million during the first quarter and the joint venture properties increasing 2.4% to $30.6 million.

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Average starting Manhattan office rents of $57.84 per rentable square foot for the first quarter represented a 37.0% increase over the previously fully escalated rents.

Occupancy for the Manhattan portfolio increased from 97.0% at December 31, 2006 to 97.3% at March 31, 2007.  During the quarter, the Company signed 57 leases for the Manhattan portfolio totaling 409,748 square feet, with 45 leases and 330,972 square feet representing office leases.

Average starting Suburban office rents of $30.35 per rentable square foot for the first quarter represented an 11.2% increase over the previously fully escalated rents.

Occupancy for the Suburban portfolio increased from 92.1% at acquisition on January 25, 2007 to 92.7% at March 31, 2007.  During the quarter, the Company signed 24 leases for the Suburban portfolio totaling 139,828 square feet, with 22 leases and 139,503 square feet representing office leases.

Significant leasing activities during the first quarter included:

-                    Expansion with The Millwork Trading Co. Ltd. for approximately 70,538 square feet at 1372 Broadway.

-                    Early renewal with Hess Corporation for approximately 53,522 square feet at 1185 Avenue of the Americas.

-                    Additional expansion with New York Presbyterian Hospital for approximately 48,896 square feet at 673 First Avenue.

-                    Early renewal with Progressive Plan Administrators, Inc., Inc. for approximately 29,291 square feet at 470 Park Avenue South.

-                    Expansion with Skadden Arps Slate Meagher & Flom LLP for approximately 15,418 square feet at 360 Hamilton Avenue, White Plains.

-                    Early renewal and expansion with Oppenheimer & Co. for approximately 16,111 square feet at 750 Washington Avenue, Stamford.

-                    New lease with Garrison Investment Group for approximately 13,927 square feet at 1350 Avenue of the Americas.

-                    New lease with Morgan Stanley for approximately 12,135 square feet at 4 Landmark Square, Stamford.

We have not yet obtained all the information necessary to finalize our estimates to complete the purchase price allocations related to the Reckson acquisition under SFAS 141, “Business Combinations.” The purchase price allocations will be finalized once the information we identified has been received, which should not be longer than one year from the date of acquisition.

Real Estate Investment Activity

During the first quarter of 2007, the Company announced/closed investments totaling approximately $4.1 billion.

Investment activity announced during the first quarter included:

-                    In January 2007, we acquired Reckson Associates Realty Corp. for approximately $6.0 billion, inclusive of transaction costs.  Simultaneously, we sold approximately $2.0 billion of the Reckson assets to an asset purchasing venture

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                        which includes certain former members of Reckson’s senior management.  The transaction includes the acquisition of 30 properties encompassing approximately 9.2 million square feet, of which five properties encompassing approximately 4.2 million square feet are located in New York City.  In connection with the acquisition, we issued approximately 9.0 million shares of our common stock, closed on $298.0 million of new mortgage financing and a $500.0 million term loan, and assumed approximately $226.3 million of mortgage debt, approximately $967.8 million of public unsecured notes and approximately $287.5 million of public convertible debt.  In connection with the Reckson acquisition, we made loans totaling $215.0 million to the asset purchasing venture.  In March 2007, we sold $200.0 million of these loans.

-                    In March 2007, a joint venture between our company, SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, and SEB Immobilier — Investment GmbH sold One Park Avenue for $550.0 million. We received approximately $109.0 million in proceeds from the sale, approximately $77.2 million of which represented an incentive distribution under our joint venture arrangement with SEB.

-                    In March 2007, the Company sold 70 West 36th Street for $61.5 million. The Company recognized a gain of approximately $47.2 million on the sale.

-                    In April 2007, SL Green completed the acquisition of 331 Madison Avenue and 48 East 43rd Street for a total of $73.0 million. Both 331 Madison Avenue and 48 East 43rd Street are located adjacent to 317 Madison Avenue, a property that SL Green acquired in 2001. 331 Madison Avenue is an approximately 92,000-square foot, 14-story office building. The 22,850-square-foot 48 East 43rd Street property is a seven-story loft building that was later converted to office use.

-                    In March 2007, SL Green announced that it had entered into an agreement to sell its condominium interests at 125 Broad Street in downtown Manhattan to Mack-Cali Realty Corporation.  In a related transaction, SL Green agreed to acquire an office property located at 500 West Putnam Avenue in Greenwich, Connecticut from Mack-Cali. The two transactions, which are subject to customary closing conditions, are expected to close during the second quarter of 2007. The condominium units at 125 Broad Street are being sold for a total of $273.0 million. The Greenwich property, a four-story, 121,500-square-foot office building, is being purchased by SL Green for $56.0 million.

-                    In January 2007, we acquired 300 Main Street in Stamford, Connecticut and 399 Knollwood Road in White Plains, New York for approximately $46.6 million, inclusive of 50,000 square feet of garage parking at 300 Main Street, from affiliates of RPW Group.

Financing and Capital Activity

In January 2007, we exercised the accordion feature in our unsecured revolving line of credit. As a result, the capacity under the unsecured revolver increased by $300.0 million to $800.0 million.

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On January 29, 2007, we completed a refinancing of the first mortgage loan on 485 Lexington Avenue for $450.0 million.  The ten-year interest only mortgage has an effective interest rate of 5.566%. The mortgage matures in February 2017.

In March 2007, SL Green issued $750.0 million of 3.00% Exchangeable Senior Notes which are due in 2027. The Notes were offered in accordance with Rule 144A under the Securities Act of 1933, as amended. The Notes will pay interest semi-annually at a rate of 3.00% per annum and mature on March 30, 2027. The Notes will have an initial exchange rate representing an exchange price that is at a 25.0% premium to the last reported sale price of the Company’s common stock on March 20, 2007. The net proceeds from the offering were approximately $736.0 million, after deducting estimated fees and expenses.  The proceeds of the offering were used to repay certain of the Company’s existing indebtedness, make investments in additional properties, make open market purchases of the Company’s common stock and for general corporate purposes.

The Board of Directors of the Company approved a stock purchase plan under which the Company can buy up to $300.0 million of its common stock. This plan will expire on December 31, 2008. In April, 2007, the Company bought approximately 16,000 shares of its common stock at an average share price of $132.48.

In March 2007, we repaid and terminated our $325.0 million term facility that was scheduled to mature in August 2009. In connection with the repayment, the Company realized a one time expense of $3.1 million for exit fees and the write-off of unamortized deferred financing costs.

On March 23, 2007, provided notice to the holders of our $150.0 million, 7.20% Senior Unsecured Notes due 2007 and our $50.0 million 6.00% Notes due 2007 notifying the holders of such notes that we were exercising rights under the governing documents of the notes to redeem each series of notes in full.  The redemption of notes is expected to occur in April 2007.

Structured Finance Activity

The Company’s structured finance investments totaled $688.3 million on March 31, 2007, an increase of approximately $243.3 million over the balance at December 31, 2006. The structured finance investments currently have a weighted average maturity of 6.4 years.  The weighted average yield for the quarter ended March 31, 2007 was 9.98%, compared to a yield of 10.3% for the quarter ended March 31, 2006.

During the first quarter 2007, the Company originated $448.3 million of structured finance investments comprised of the following: $136.9 million assumed in connection with the Reckson merger, which yield approximately 13.0%, $215.0 million to fund RexCorp’s acquisition of its assets which yield approximately 6.3%, and $96.4 million of other mezzanine investments which yield approximately 10.4%.

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Investment In Gramercy Capital Corp.

At March 31, 2007, the book value of the Company’s investment in Gramercy totaled $119.3 million. Fees earned from various arrangements between the Company and Gramercy totaled approximately $7.7 million for the quarter ended March 31, 2007, including an incentive fee of $2.8 million earned as a result of Gramercy’s FFO (as defined in Gramercy’s management agreement) exceeding the 9.5% annual return on equity performance threshold.  The Company’s share of FFO generated from its investment in Gramercy totaled approximately $4.9 million for the quarter ended March 31, 2007, compared to $3.2 million for the same period 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 March 31, 2007, the Company’s MG&A includes approximately $2.4 million of costs associated with Gramercy.

Dividends

During the first quarter of 2007, the Company declared quarterly dividends on its outstanding common and preferred stock as follows:

-                    $0.70 per share of common stock. Dividends were paid on April 12, 2007 to stockholders of record on the close of business on March 30, 2007.

-                    $0.4766 and $0.4922 per share on the Company’s Series C and D Preferred Stock, respectively, for the period January 15, 2007 through and including April 14, 2007. Distributions were made on April 12, 2007 to stockholders of record on the close of business on March 30, 2007. Distributions reflect regular quarterly distributions, which are the equivalent of an annualized distribution of $1.90625 and $1.96875, respectively.

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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, April, 24 2007 at 2:00 p.m. EDT to discuss first quarter financial results. The conference call may be accessed by dialing (800) 901-5259 Domestic or (617) 786-4514 International, SL Green is the passcode. The live conference will be simultaneously broadcast in a listen-only mode on the Company’s web site at www.slgreen.com. The Supplemental Package outlining first quarter 2007 financial results will be available prior to the quarterly conference call on the Company’s web site.

A replay of the call will be available through Tuesday, May 1, 2007 by dialing (888) 286-8010 Domestic or (617) 801-6888 International, using pass code 93027870.

Supplemental Information

The Supplemental Package outlining first quarter 2007 financial results will be available prior to the quarterly conference call on the Company’s website.

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 Manhattan office properties. The Company is the only publicly held REIT that specializes in this niche.  As of March 31, 2007, the Company owned 32 New York City office properties totaling approximately 23.5 million square feet, making it New York’s largest office landlord. In addition, SL Green holds investment interests in Manhattan retail properties totaling approximately 300,000 square feet at eight properties, along with ownership of 28 suburban assets totaling 4.7 million square feet in Westchester County, Connecticut and New Jersey.

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.

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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 9 and 11 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)

		Three Months Ended March 31,
		2007			2006
Revenue:
Rental revenue, net		$	155,553		$	79,090
Escalations & reimbursement revenues		28,612			13,927
Preferred equity and investment income		21,709			13,479
Other income		89,897			9,870
Total revenues		295,771			116,366
Equity in net income from unconsolidated joint ventures		9,354			9,968
Expenses:
Operating expenses		49,572			27,795
Ground rent		7,265			4,921
Real estate taxes		31,229			17,708
Marketing, general and administrative		34,247			12,986
Total expenses		122,313			63,410
Earnings Before Interest, Depreciation and Amortization (EBITDA)		182,812			62,924
Interest expense		57,591			17,491
Amortization of deferred financing costs		3,301			714
Depreciation and amortization		37,991			15,636
Net income from Continuing Operations		83,929			29,083
Income from Discontinued Operations, net of minority interests		526			1,659
Equity in net gain on sale of interest in unconsolidated joint venture		31,509			—
Gain on sale of real estate		47,229			—
Minority interests		(10,797		)	(2,041		)
Preferred stock dividends		(4,969		)	(4,969		)
Net income available to common shareholders		$	147,427		$	23,732
Net income per share (Basic)		$	2.60		$	0.55
Net income per share (Diluted)		$	2.53		$	0.54
Funds From Operations (FFO)
FFO per share (Basic)		$	2.09		$	1.11
FFO per share (Diluted)		$	2.03		$	1.08
FFO Calculation:
Net income from continuing operations		$	83,929		$	29,083
Add:
Depreciation and amortization		37,991			15,636
FFO from Discontinued Operations		1,179			2,895
FFO adjustment for Joint Ventures		5,822			7,980
Less:
Dividend on perpetual preferred stock		(4,969		)	(4,969		)
Depreciation of non-real estate assets		(236		)	(267		)
FFO before minority interests – BASIC and DILUTED		$	123,716		$	50,358
Basic ownership interest
Weighted average REIT common shares for net income per share		56,649			42,858
Weighted average partnership units held by minority interests		2,652			2,311
Basic weighted average shares and units outstanding for FFO per share		59,301			45,169
Diluted ownership interest
Weighted average REIT common share and common share equivalents		58,278			44,297
Weighted average partnership units held by minority interests		2,652			2,311
Diluted weighted average shares and units outstanding		60,930			46,608

 

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SL GREEN REALTY CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)

		March 31, 2007			December 31, 2006
		(Unaudited)
Assets
Commercial real estate properties, at cost:
Land and land interests		$	1,235,607		$	39,986
Buildings and improvements		4,930,419			2,111,970
Building leasehold and improvements		1,093,514			490,995
Property under capital lease		12,208			12,208
		7,271,748			3,055,159
Less accumulated depreciation		(297,365		)	(279,436		)
		6,974,383			2,775,723
Assets held for sale		96,101			—
Cash and cash equivalents		499,728			117,178
Restricted cash		128,223			252,272
Tenant and other receivables, net of allowance of $12,114 and $11,079 in 2007 and 2006, respectively		53,040			34,483
Related party receivables		14,938			7,195
Deferred rents receivable, net of allowance of $12,756 and $10,925 in 2007 and 2006, respectively		103,267			96,624
Structured finance investments, net of discount of $14,542 and $14,804 in 2007 and 2006, respectively		688,303			445,026
Investments in unconsolidated joint ventures		743,978			686,069
Deferred costs, net		116,760			97,850
Other assets		207,064			119,807
Total assets		$	9,625,785		$	4,632,227
Liabilities and Stockholders’ Equity
Mortgage notes payable		$	2,156,575		$	1,190,379
Revolving credit facility		—			—
Term loans and unsecured notes		2,692,730			525,000
Accrued interest and other liabilities		36,784			10,008
Accounts payable and accrued expenses		169,736			138,181
Deferred revenue/gain		44,082			43,721
Capitalized lease obligation		16,430			16,394
Deferred land lease payable		17,095			16,938
Dividend and distributions payable		47,427			40,917
Security deposits		39,103			27,913
Liabilities related to Assets held for sale		74,636			—
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities		100,000			100,000
Total liabilities		5,394,598			2,109,451
Commitments and contingencies					—
Minority interest in other partnerships		580,424			56,162
Minority interest in operating partnership		75,996			71,731
Stockholders’ Equity
7.625% Series C perpetual preferred shares, $0.01 per value, $25.00 liquidation preference, 6,300 issued and outstanding at March 31, 2007 and December 31, 2006, respectively		151,981			151,981
7.875% Series D perpetual preferred shares, $0.01 per value, $25.00 liquidation preference, 4,000 issued and outstanding at March 31, 2007 and December 31, 2006, respectively		96,321			96,321
Common stock, $0.01 par value 100,000 shares authorized, 59,182 and 49,840 issued and outstanding at March 31, 2007 and December 31, 2006, respectively		592			498
Additional paid - in capital		2,886,092			1,809,893
Accumulated other comprehensive income		11,568			13,971
Retained earnings		428,213			322,219
Total stockholders’ equity		3,574,767			2,394,883
Total liabilities and stockholders’ equity		$	9,625,785		$	4,632,227

 

10

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SL GREEN REALTY CORP.
SELECTED OPERATING DATA-UNAUDITED

		March 31,
		2007			2006
Manhattan Operating Data: (1)
Net rentable area at end of period (in 000’s)		22,112			18,620
Portfolio percentage leased at end of period		97.3%			95.2%
Same-Store percentage leased at end of period		97.6%			96.3%
Number of properties in operation		31			29
Office square feet leased during quarter (rentable)		330,972			539,399
Average mark-to-market percentage-office		37.0%			16.7%
Average starting cash rent per rentable square foot-office		$	57.84		$	37.74

(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)

		Three Months Ended March 31,
		2007			2006
Earnings before interest, depreciation and amortization (EBITDA):		$	182,812		$	62,924
Add:
Marketing, general & administrative expense		34,247			12,986
Operating income from discontinued operations		2,505			4,255
Less:
Non-building revenue		107,766			18,869
Equity in net income from joint ventures		9,354			9,968
GAAP net operating income (GAAP NOI)		102,444			51,328
Less:
Operating income from discontinued operations		(2,505			(4,255
GAAP NOI from other properties/affiliates		(48,905			266
Same-Store GAAP NOI		$	51,034		$	47,299

*                    See page 9 for a reconciliation of FFO and EBITDA to net income.

11

Exhibit 99.2

SL Green Realty Corp.

First Quarter 2007

Supplemental Data

March 31, 2007

 

 

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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 March 31, 2007 that will subsequently be released on Form 10-Q to be filed on or before May 10, 2007.

2

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TABLE OF CONTENTS

 

 

3

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CORPORATE PROFILE

 

SL Green Realty Corp., or the Company, is New York City’s largest commercial office landlord and is the only fully integrated, self-managed, self-administered Real Estate Investment Trust, or REIT, primarily focused on owning and operating office buildings in Manhattan.

The Company was formed on August 20, 1997 to continue the commercial real estate business of S.L. Green Properties Inc., a company that was 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 strategically acquiring, redeveloping and repositioning office properties primarily located in Manhattan, and re-leasing and managing these properties for maximum cash flow.

In 2007, SL Green acquired Reckson Associates Realty Corp. and added over 9 million square feet to its portfolio. Included in this total is over 3 million square feet of  Class A office space located in Westchester, New York and Stamford, Connecticut.  These suburban portfolios serve as natural extensions of SL Green’s core ownership in the Grand Central submarket of Midtown Manhattan. The Company has since made selective additions to the holdings in these areas.

Looking forward, SL Green 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. Structured finance investments include SL Green’s interest in Gramercy Capital Corp., or Gramercy, (NYSE: GKK) since 2004. SL Green owns approximately 25% of Gramercy. This three-legged investment strategy allows SL Green to balance the components of its portfolio to take advantage of each stage in the business cycle.

4

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

FINANCIAL RESULTS

Funds From Operations, or FFO, available to common stockholders totaled $123.7 million, or $2.03 per share for the first quarter ended March 31, 2007, an 88.0% increase over the same quarter in 2006 when FFO totaled $50.4 million, or $1.08 per share.  The 2007 results include an incentive distribution of $77.2 million ($1.27 per share) from the sale of One Park Avenue.

Net income available for common stockholders totaled $147.4 million, or $2.53 per share (diluted) for the first quarter ended March 31, 2007. Net income available to common stockholders totaled $23.7 million or $0.54 per share in the same quarter in 2006.  First quarter 2007 results include gains on sale of $1.29 per share compared to no gains on sale in 2006.

Funds available for distribution, or FAD, for the first quarter 2007 increased to $1.93 per share (diluted) versus $0.80 per share (diluted) in the prior year, a 141.3% increase.

The Company’s dividend payout ratio was 34.5% of FFO and 36.2% of FAD before first cycle leasing costs.

All per share amounts are presented on a diluted basis.

CONSOLIDATED RESULTS

Total quarterly revenues increased 154.2% in the first quarter to $295.8 million compared to $116.4 million in the prior year.  The $179.4 million growth in revenue resulted primarily from the following items:

·                  $82.6 million increase from 2007 and 2006 acquisitions, including the Reckson properties,

·                  $8.0 million increase from same-store properties,

·                  $8.2 million increase in preferred equity and investment income, and

·                  $80.6 million increase in other revenue, which was primarily due to incentive fees earned in 2007 ($77.2 million) as well as from fees earned from Gramercy ($2.6 million) and the Service Corporation ($2.2 million).

The Company’s earnings before interest, taxes, depreciation and amortization, or EBITDA, increased by $119.9 million (190.5%) to $182.8 million.  The following items drove EBITDA improvements:

·                  $48.6 million increase from 2007 and 2006 acquisitions, including the Reckson properties,

·                  $3.7 million increase from same-store properties.

·                  $8.2 million increase in preferred equity and investment income.  The weighted-average structured finance investment balance for the quarter increased to $718.7 million from $453.1 million in the prior year first quarter. The weighted-average yield for the quarter was 10.7% compared to 10.3% in the prior year.

·                  $0.6 million decrease from reductions in contributions to equity in net income from unconsolidated joint ventures primarily due to our investments at 521 Fifth Avenue, which is under redevelopment ($0.7 million) and the Mack-

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

                        Green joint venture ($1.3 million).  This was partially offset by increased contributions from Gramercy ($1.6 million) and One Park Avenue ($0.6 million).

·                  $21.3 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, as well as a one time charge associated with 9 new employment agreements of approximately $13.0 million.

·                  $81.3 million increase in non-real estate revenues net of expenses, primarily due to incentive fees earned in 2007 ($77.2 million) in addition to fee income from Gramercy ($2.6 million) and the Service Corporation ($1.5 million).

FFO before minority interests improved $73.4 million primarily as a result of:

·                  $119.9 million increase in EBITDA,

·                  $3.8 million decrease in FFO from unconsolidated joint ventures, discontinued operations and non-real estate depreciation, and

·                  $42.7 million decrease from higher interest expense.

SAME-STORE RESULTS

Consolidated Properties

Same-store first quarter 2007 GAAP NOI increased $3.7 million (7.9%) to $51.0 million compared to the prior year.  Operating margins before ground rent increased from 54.00% to 54.05%.

The $3.7 million increase in GAAP NOI was primarily due to:

·                  $5.3 million (6.7%) increase in rental revenue primarily due to improved leasing,

·                  $2.8 million (19.7%) increase in escalation and reimbursement revenue,

·                  $1.2 million (56.8%) decrease in investment and other income,

·                  $3.0 million (11.7%) increase in operating expenses, primarily driven by increases in payroll, repairs and maintenance and utility costs, but was offset by reductions in insurance costs, and

·                  $0.2 million (1.5%) increase in real estate taxes.

Joint Venture Properties

The Joint Venture same-store properties first quarter 2007 GAAP NOI increased $0.7 million (2.4%) to $30.6 million compared to the prior year.  Operating margins before ground rent decreased from 60.55% to 60.42%.

The $0.7 million increase in GAAP NOI was primarily due to:

·                  $1.0 million (2.6%) increase in rental revenue primarily due to improved leasing,

·                  $0.2 million (2.0%) increase in escalation and reimbursement revenue primarily due to electric reimbursements and real estate tax and operating expense recoveries,

·                  $0.1 million (21.3%) increase in other income,

6

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

·                  $0.4 million (3.1%) increase in operating expenses primarily driven by increases in utilities and insurance, and real estate taxes, and

·                  $0.2 million (2.1%) increase in real estate taxes.

STRUCTURED FINANCE ACTIVITY

As of March 31, 2007, our structured finance and preferred equity investments totaled $668.3 million.  The weighted average balance outstanding for the first quarter of 2007 was $718.7 million.  During the first quarter of 2007 the weighted average yield was 9.98%.

During the first quarter 2007, the Company originated $448.3 million of structured finance investments, comprised of the following: $136.9 million assumed in connection with the Reckson merger, which yield approximately 13.0%, $215.0 million to fund RexCorp’s acquisition of its assets which yield approximately 6.3%, and $96.4 million of other mezzanine investments which yield approximately 10.4%.

QUARTERLY LEASING HIGHLIGHTS

Manhattan vacancy at December 31, 2006 was 574,559 useable square feet net of holdover tenants.  During the quarter, 235,426 additional useable office, retail and storage square feet became available at an average escalated cash rent of $43.52 per rentable square foot.  The Company acquired 62,476 of available usable square feet in connection with the closing of the Manhattan portion of the Reckson transaction.  The Company sold 21,184 of available usable square feet in connection with the sale of One Park Avenue and 70 West 36th Street.  Space available to lease during the quarter totaled 851,277 useable square feet, or 3.8% of the total Manhattan portfolio.

During the first quarter, 45 Manhattan office leases, including early renewals, were signed totaling 330,972 rentable square feet.  New cash rents averaged $57.84 per rentable square foot.  Replacement rents were 37.0% higher than rents on previously occupied space, which had fully escalated cash rents averaging $42.21 per rentable square foot.  The average lease term was 7.2 years and average tenant concessions were 2.7 months of free rent with a tenant improvement allowance of $24.93 per rentable square foot.

The Company acquired 480,616 of available usable square feet in connection with the closing of the Suburban portion of the Reckson transaction.  During the quarter, 85,845 additional useable office, retail and storage square feet became available at an average escalated cash rent of $29.52 per rentable square foot.  Space available to lease during the quarter totaled 566,461 useable square feet, or 9.3% of the total Suburban portfolio.

During the first quarter, 22 Suburban office leases, including early renewals, were signed totaling 139,503 rentable square feet.  New cash rents averaged $30.35 per rentable square foot.  Replacement rents were 11.2% higher than rents on previously occupied space, which had fully escalated cash rents averaging $27.36 per rentable square foot.  The average lease term was

7

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

5.8 years and average tenant concessions were 1.1 months of free rent with a tenant improvement allowance of $17.82 per rentable square foot.

The Company also signed a total of 14 retail and storage leases, including early renewals, for 79,101 rentable square feet.  The average lease term was 15.5 years and the average tenant concessions were 3.8 months of free rent with a tenant improvement allowance of $5.69 per rentable square foot.

REAL ESTATE ACTIVITY

Real estate investment transactions entered into during the first quarter totaled approximately $4.1 billion and included:

-                    In January 2007, we acquired Reckson Associates Realty Corp. for approximately $6.0 billion, inclusive of transaction costs.  Simultaneously, we sold approximately $2.0 billion of the Reckson assets to an asset purchasing venture which includes certain former members of Reckson’s senior management.  The transaction includes the acquisition of 30 properties encompassing approximately 9.2 million square feet, of which five properties encompassing approximately 4.2 million square feet are located in New York City.  In connection with the acquisition, we issued approximately 9.0 million shares of our common stock, closed on $298.0 million of new mortgage financing and a $500.0 million term loan, and assumed approximately $226.3 million of mortgage debt, approximately $967.8 million of public unsecured notes and approximately $287.5 million of public convertible debt.  In connection with the Reckson acquisition, we made loans totaling $215.0 million to the asset purchasing venture.  In March 2007, we sold $200.0 million of these loans.

-                    In March 2007, a joint venture between our company, SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, and SEB Immobilier — Investment GmbH sold One Park Avenue for $550.0 million. We received approximately $109.0 million in proceeds from the sale, approximately $77.2 million of which represented an incentive distribution under our joint venture arrangement with SEB.

-                    In March 2007, the Company sold 70 West 36th Street for $61.5 million. The Company recognized a gain of approximately $47.2 million on the sale.

-                    In April 2007, SL Green completed the acquisition of 331 Madison Avenue and 48 East 43rd Street for a total of $73.0 million. Both 331 Madison Avenue and 48 East 43rd Street are located adjacent to 317 Madison Avenue, a property that SL Green acquired in 2001. 331 Madison Avenue is an approximately 92,000-square foot, 14-story office building. The 22,850-square-foot 48 East 43rd Street property is a seven-story loft building that was later converted to office use.

-                    In March 2007, SL Green announced that it had entered into an agreement to sell its condominium interests at

8

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

                        125 Broad Street in downtown Manhattan to Mack-Cali Realty Corporation.  In a related transaction, SL Green agreed to acquire an office property located at 500 West Putnam Avenue in Greenwich, Connecticut from Mack-Cali. The two transactions, which are subject to customary closing conditions, are expected to close during the second quarter of 2007. The condominium units at 125 Broad Street are being sold for a total of $273.0 million. The Greenwich property, a four-story, 121,500-square-foot office building, is being purchased by SL Green for $56.0 million.

-                    In January 2007, we acquired 300 Main Street in Stamford, Connecticut and 399 Knollwood Road in White Plains, New York for approximately $46.6 million, inclusive of 50,000 square feet of garage parking at 300 Main Street, from affiliates of RPW Group.

Investment In Gramercy Capital Corp.

At March 31, 2007, the book value of the Company’s investment in Gramercy totaled $119.3 million. Fees earned from various arrangements between the Company and Gramercy totaled approximately $7.7 million for the quarter ended March 31, 2007, including an incentive fee of $2.8 million earned as a result of Gramercy’s FFO (as defined in Gramercy’s management agreement) exceeding the 9.5% annual return on equity performance threshold.  The Company’s share of FFO generated from its investment in Gramercy totaled approximately $4.9 million for the quarter ended March 31, 2007, compared to $3.2 million for the same period 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 March 31, 2007, the Company’s MG&A includes approximately $2.4 million of costs associated with Gramercy.

Financing/ Capital Activity

In January 2007, we exercised the accordion feature in our unsecured revolving line of credit. As a result, the capacity under the unsecured revolver increased by $300.0 million to $800.0 million.

On January 29, 2007, we completed a refinancing of the first mortgage loan on 485 Lexington Avenue for $450.0 million.  The ten-year interest only mortgage has an effective interest rate of 5.566%. The mortgage matures in February 2017.

In March 2007, SL Green issued $750.0 million of 3.00% Exchangeable Senior Notes which are due in 2027. The Notes were offered in accordance with Rule 144A under the Securities Act of 1933, as amended. The Notes will pay interest semi-annually at a rate of 3.00% per annum and mature on March 30, 2027. The Notes will have an initial exchange rate representing an exchange price that is at a 25.0% premium to the last reported sale price of the Company’s common stock on March 20, 2007. The net proceeds from the offering were

9

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FINANCIAL HIGHLIGHTS FIRST QUARTER 2007 UNAUDITED

 

approximately $736.0 million, after deducting estimated fees and expenses.  The proceeds of the offering were used to repay certain of the Company’s existing indebtedness, make investments in additional properties, make open market purchases of the Company’s common stock and for general corporate purposes.

The Board of Directors of the Company approved a stock purchase plan under which the Company can buy up to $300.0 million of its common stock. This plan will expire on December 31, 2008. In April, 2007, the Company bought approximately 16,000 shares of its common stock at an average share price of $132.48.

In March 2007, we repaid and terminated our $325.0 million term facility that was scheduled to mature in August 2009. In connection with the repayment, the Company realized a one-time expense of $3.1 million for exit fees and the write-off of unamortized deferred financing costs.

On March 23, 2007, we mailed notices to the holders of our $150.0 million, 7.20% Senior Unsecured Notes due 2007 and our $50.0 million 6.00% Notes due 2007 notifying the holders of such notes that we were exercising rights under the governing documents of the notes to redeem each series of notes in full.  The redemption of notes is expected to occur in April 2007.

Dividends

On March 15, 2007, the Company declared a dividend of $0.70 per common share for the first quarter 2007.  The dividend was payable April 13, 2007 to stockholders of record on the close of business on March 30, 2007.  This distribution reflects the regular quarterly dividend, which is the equivalent of an annualized distribution of $2.80 per common share.

On March 15, 2007, the Company also approved a distribution on its Series C preferred stock for the period January 15, 2007 through and including April 14, 2007, of $0.4766 per share, payable April 13, 2007 to stockholders of record on the close of business on March 30, 2007. The distribution reflects the regular quarterly distribution, which is the equivalent of an annualized distribution of $1.90625 per Series C preferred stock.

On March 15, 2007, the Company also approved a distribution on its Series D preferred stock for the period January 15, 2007 through and including April 14, 2007, of $0.4922 per share, payable April 13, 2007 to stockholders of record on the close of business on March 30, 2007. The distribution reflects the regular quarterly distribution, which is the equivalent of an annualized distribution of $1.96875 per Series D preferred stock.

10

 

SL Green Realty Corp. Key Financial Data March 31, 2007 (Dollars in Thousands Except Per Share and Sq. Ft.)

 

		As of or for the three months ended
		3/31/2007			12/31/2006			9/30/2006			6/30/2006			3/31/2006
Earnings Per Share
Net income available to common shareholders - diluted		$	2.53		$	0.62		$	2.53		$	0.65		$	0.54
Funds from operations available to common shareholders - diluted		$	2.03		$	1.18		$	1.13		$	1.22		$	1.08
Funds available for distribution to common shareholders - diluted		$	1.93		$	0.78		$	0.81		$	0.94		$	0.80
Common Share Price & Dividends
At the end of the period		$	137.18		$	132.78		$	111.70		$	109.47		$	101.50
High during period		$	156.10		$	139.50		$	115.90		$	109.47		$	103.09
Low during period		$	131.81		$	112.37		$	107.17		$	95.31		$	77.70
Common dividends per share		$	0.70		$	0.70		$	0.60		$	0.60		$	0.60
FFO Payout Ratio		34.47%			59.16%					%	49.20%			55.53%
FAD Payout Ratio		36.21%			90.23%			73.75%			63.91%			75.02%
Common Shares & Units
Common shares outstanding		59,182			49,840			45,774			43,226			43,133
Units outstanding		2,619			2,694			2,219			2,219			2,263
Total shares and units outstanding		61,801			52,534			47,993			45,445			45,396
Weighted average common shares and units outstanding - basic		59,301			49,689			47,495			45,421			45,169
Weighted average common shares and units outstanding - diluted		60,930			51,160			49,215			46,901			46,608
Market Capitalization
Market value of common equity		$	8,477,861		$	6,975,465		$	5,360,818		$	4,974,864		$	4,607,694
Liquidation value of preferred equity		257,500			257,500			257,500			257,500			257,500
Consolidated debt		5,023,057			1,815,379			1,975,325			1,853,644			1,693,907
Consolidated market capitalization		$	13,758,418		$	9,048,344		$	7,593,643		$	7,086,008		$	6,559,101
SLG portion JV debt		1,264,200			1,209,281			1,181,397			1,179,332			1,111,160
Combined market capitalization		$	15,022,618		$	10,257,625		$	8,775,040		$	8,265,340		$	7,670,261
Consolidated debt to market capitalization		36.51%			20.06%			26.01%			26.16%		\	25.83%
Combined debt to market capitalization		41.85%			29.49%			35.97%			36.70%			36.57%
Consolidated debt service coverage		3.00			3.12			3.38			3.63			3.55
Consolidated fixed charge coverage		2.53			2.36			2.47			2.59			2.45
Combined fixed charge coverage		2.18			1.89			1.93			2.03			1.95
Portfolio Statistics (Manhattan)
Consolidated office buildings		24			20			20			23			22
Unconsolidated office buildings		7			8			7			7			7
		31			28			27			30			29
Consolidated office buildings square footage		14,145,000			10,086,000			9,625,000			9,965,000			9,805,000
Unconsolidated office buildings square footage		7,966,900			8,879,900			8,814,900			8,814,900			8,814,900
		22,111,900			18,965,900			18,439,900			18,779,900			18,619,900
Quarter end occupancy-portfolio		97.3%			97.0%			96.1%			95.9%			95.2%
Quarter end occupancy- same store - wholly owned		98.7%			97.5%			97.0%			96.7%			96.0%
Quarter end occupancy- same store - combined (wholly owned + joint venture)		97.6%			97.4%			97.2%			96.9%			96.3%

 

11

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SL Green Realty Corp. Key Financial Data March 31, 2007 (Dollars in Thousands Except Per Share and Sq. Ft.)

 

		As of or for the three months ended
		3/31/2007			12/31/2006			9/30/2006			6/30/2006			3/31/2006
Selected Balance Sheet Data
Real estate assets before depreciation		$	7,375,047		$	3,055,159		$	2,824,688		$	2,634,724		$	2,343,714
Investments in unconsolidated joint ventures		$	743,978		$	686,069		$	549,040		$	571,418		$	533,145
Structured finance investments		$	688,303		$	445,026		$	347,558		$	333,989		$	466,173
Total Assets		$	9,625,785		$	4,632,227		$	4,226,806		$	3,691,952		$	3,482,532
Fixed rate & hedged debt		$	4,015,996		$	1,511,714		$	1,418,106		$	1,419,065		$	1,254,116
Variable rate debt		933,309			303,665			462,219			339,579			439,791
Total consolidated debt		$	4,949,305		$	1,815,379		$	1,880,325		$	1,758,644		$	1,693,907
Total Liabilities		$	5,394,598		$	2,109,451		$	2,239,912		$	2,090,786		$	1,893,838
Fixed rate & hedged debt-including SLG portion of JV debt		$	4,657,260		$	2,099,716		$	1,957,206		$	1,958,896		$	1,768,857
Variable rate debt - including SLG portion of JV debt		1,556,245			924,944			1,104,516			979,080			1,036,210
Total combined debt		$	6,213,505		$	3,024,660		$	3,061,722		$	2,937,976		$	2,805,067
Selected Operating Data
Property operating revenues		$	184,165		$	113,578		$	108,298		$	98,994		$	93,017
Property operating expenses		88,066			54,060			56,602			50,883			50,423
Property operating NOI		$	96,099		$	59,518		$	51,696		$	48,111		$	42,594
NOI from discontinued operations		2,505			2,315			3,998			4,734			4,255
Total property operating NOI		$	98,604		$	61,833		$	55,694		$	52,845		$	46,849
SLG share of Property NOI from JVs		$	37,364		$	37,419		$	36,587		$	33,834		$	32,130
SLG share of FFO from Gramercy Capital		$	4,894		$	5,083		$	4,125		$	3,694		$	3,168
Structured finance income		$	21,709		$	15,202		$	15,978		$	17,305		$	13,479
Other income		$	89,897		$	26,192		$	9,493		$	11,442		$	9,869
Marketing general & administrative expenses		$	34,247		$	25,669		$	13,830		$	13,257		$	12,986
Consolidated interest		$	58,917		$	29,834		$	24,764		$	22,901		$	18,850
Combined interest		$	79,239		$	50,154		$	43,990		$	40,088		$	34,428
Preferred Dividend		$	4,969		$	4,969		$	4,969		$	4,969		$	4,969
Office Leasing Statistics (Manhattan)
Total office leases signed		45			38			56			57			65
Total office square footage leased		330,972			452,497			586,223			427,862			539,399
Average rent psf		$	57.84		$	61.99		$	62.67		$	46.40		$	37.74
Escalated rents psf		$	42.21		$	48.18		$	49.81		$	42.08		$	32.33
Percentage of rent over escalated		37.0%			28.7%			25.8%			10.3%			16.7%
Tenant concession packages psf		$	24.93		$	32.49		$	14.90		$	24.89		$	12.91
Free rent months		2.7			3.3			1.9			2.5			2.1

 

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SL Green Realty Corp. Key Financial Data March 31, 2007 (Dollars in Thousands Except Per Share and Sq. Ft.)

 

Suburban Properties

		As of or for the three months ended
		3/31/2007 (1)			12/31/2006			9/30/2006			6/30/2006			3/31/2006
Selected Operating Data (Suburban)
Property operating revenues		$	22,641		$	—		$	—		$	—		$	—
Property operating expenses		9,228			—			—			—			—
Property operating NOI		$	13,413		$	—		$	—		$	—		$	—
SLG share of Property NOI from JV		$	1,768		—			—			—			—
Consolidated interest		$	3,580		—			—			—			—
Combined interest		$	4,482		—			—			—			—
Portfolio Statistics (Suburban)
Consolidated office buildings		28			—			—			—			—
Unconsolidated office buildings		1			—			—			—			—
		29
Consolidated office buildings square footage		4,660,900			—			—			—			—
Unconsolidated office buildings square footage		1,402,000			—			—			—			—
		6,062,900
Quarter end occupancy-portfolio		92.7%			—			—			—			—
Office Leasing Statistics (Suburban)
Total office leases signed		22			—			—			—			—
Total office square footage leased		139,503			—			—			—			—
Average rent psf		$	30.44		—			—			—			—
Escalated rents psf		$	27.36		—			—			—			—
Percentage of rent over escalated		11.2%			—			—			—			—
Tenant concession packages psf		$	17.82		—			—			—			—
Free rent months		1.1			—			—			—			—

 

(1) Includes operations since January 25th, 2007.

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COMPARATIVE BALANCE SHEETS Unaudited ($000’s omitted)

 

		3/31/2007			12/31/2006			9/30/2006			6/30/2006			3/31/2006
Assets
Commercial real estate properties, at cost:
Land & land interests		$	1,235,607		$	439,986		$	349,073		$	302,821		$	270,351
Buildings & improvements fee interest		4,930,419			2,111,970			1,671,234			1,477,106			1,365,554
Buildings & improvements leasehold		1,093,514			490,995			705,900			703,843			695,601
Buildings & improvements under capital lease		12,208			12,208			12,208			12,208			12,208
		$	7,271,748		$	3,055,159		$	2,738,415		$	2,495,978		$	2,343,714
Less accumulated depreciation		(297,365		)	(279,436		)	(253,136		)	(236,727		)	(231,561		)
		$	6,974,383		$	2,775,723		$	2,485,279		$	2,259,251		$	2,112,153
Other Real Estate Investments:
Investment in unconsolidated joint ventures		743,978			686,069			549,040			571,418			533,145
Structured finance investments		688,303			445,026			347,558			333,989			466,173
Assets held for sale		96,101			—			121,962			170,173			—
Cash and cash equivalents		499,728			117,178			176,444			14,184			20,535
Restricted cash		128,223			252,272			227,482			61,663			59,489
Tenant and other receivables, net of $12,114 reserve at 3/31/07		53,040			34,483			32,037			27,115			21,011
Related party receivables		14,938			7,195			9,563			8,330			6,329
Deferred rents receivable, net of reserve for tenant credit loss of $12,756 at 3/31/07		103,267			96,624			85,242			81,561			80,249
Deferred costs, net		116,760			97,850			74,223			73,747			77,145
Other assets		207,064			119,807			117,976			90,521			106,303
Total Assets		$	9,625,785		$	4,632,227		$	4,226,806		$	3,691,952		$	3,482,532

 

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COMPARATIVE BALANCE SHEETS Unaudited ($000’s omitted)

 

		3/31/2007			12/31/2006			9/30/2006			6/30/2006			3/31/2006
Liabilities and Stockholders’ Equity
Mortgage notes payable		$	2,156,575		$	1,190,379		$	1,255,325		$	1,078,999		$	912,262
Term loans and unsecured notes		2,692,730			525,000			525,000			525,000			525,000
Revolving credit facilities		—			—			—			54,645			156,645
Accrued interest and other liabilities		36,784			10,008			9,353			7,991			7,706
Accounts payable and accrued expenses		169,736			138,181			96,741			84,977			69,079
Deferred revenue		44,082			43,721			63,358			49,045			30,759
Capitalized lease obligations		16,430			16,394			16,359			16,325			16,292
Deferred land lease payable		17,095			16,938			16,782			16,625			16,469
Dividend and distributions payable		47,427			40,917			33,247			31,725			31,408
Security deposits		39,103			27,913			28,368			30,075			28,218
Liabilities related to assets held for sale		74,636			—			95,379			95,379			—
Junior subordinated deferrable interest debentures		100,000			100,000			100,000			100,000			100,000
Total Liabilities		$	5,394,598		$	2,109,451		$	2,239,912		$	2,090,786		$	1,893,838
Minority interest in other partnerships		580,424			56,162			56,929			37,164			34,693
Minority interest in operating partnership (2,619 units outstanding) at 3/31/07		75,996			71,731			71,910			67,498			68,982
Stockholders’ Equity
7.625% Series C Perpetual Preferred Shares		151,981			151,981			151,981			151,981			151,981
7.875% Series D Perpetual Preferred Shares		96,321			96,321			96,321			96,321			96,321
Common stock, $.01 par value 100,000 shares authorized,  59,182 issued and outstanding at 3/31/07		592			498			458			432			431
Additional paid - in capital		2,886,092			1,809,893			1,268,491			991,241			983,144
Accumulated other comprehensive income		11,568			13,971			13,060			20,009			19,750
Retained earnings		428,213			322,219			327,744			236,520			233,392
Total Stockholders’ Equity		$	3,574,767		$	2,394,883		$	1,858,055		$	1,496,504		$	1,485,019
Total Liabilities and Stockholders’ Equity		$	9,625,785		$	4,632,227		$	4,226,806		$	3,691,952		$	3,482,532

 

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