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 21, 2008

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:

Following the issuance of a press release on April 21, 2008 announcing the Company’s results for the first quarter ended March 31, 2008, 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.

As discussed in Item 2.02 above, on April 21, 2008, the Company issued a press release announcing its results for the first quarter ended March 31, 2008.

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.

On April 22, 2008, the Company announced that it signed a new 12-year, 83,822 square foot lease with News America Incorporated, which will occupy floors 25-27 of 1185 Avenue of the Americas. The copy of the press release announcing this transaction is attached as Exhibit 99.3 hereto and is incorporated herein by reference.

(c)           Exhibits

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

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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 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, 2007 and still owned at the end of the current 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.

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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.

Date:  April 22, 2008

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Exhbit 99.1

FOR IMMEDIATE RELEASE

CONTACT

Gregory F. Hughes

Chief Operating Officer and

Chief Financial Officer

(212) 594-2700

or

Heidi Gillette

Investor Relations

(212) 216-1601

SL GREEN REALTY CORP. REPORTS

FIRST QUARTER 2008 FFO OF $1.44 PER SHARE AND

INCREASES 2008 ANNUAL GUIDANCE TO $6.20-$6.25 OF FFO PER SHARE

First Quarter Highlights

·                 First quarter FFO totaled $1.44 per share (diluted) compared to $2.03 per share (diluted) during the first quarter of 2007.  The 2007 results include an incentive distribution of $77.2 million ($1.27 per share diluted) from the sale of One Park Avenue.  Excluding the incentive fee from 2007 results, FFO per share increased 89.5% quarter over quarter.

·                 Net income available to common stockholders for the first quarter of 2008 totaled $2.14 per share (diluted) compared to $2.53 per share (diluted) in the same period in the prior year.

·                 Signed 41 Manhattan office leases totaling 508,960 square feet during the first quarter, finishing the quarter at 96.3% occupancy for the Manhattan portfolio.  The leases carried an average rent of $62.32.

·                 Increased average Manhattan office starting rents by 43.9% over previously fully escalated rents reflecting continued growth in rents for Manhattan office leases signed during the first quarter.

·                 Recognized combined same-store GAAP NOI growth of 12.2% during the first quarter including 14.2% from the consolidated same-store properties and 5.5% from the unconsolidated joint venture same-store properties.

·                 Closed on the acquisition of 182 Broadway and 63 Nassau Street through a joint venture for approximately $30.0 million.

·                 Closed on the previously announced sale of 440 Ninth Avenue for $160.0 million, generating a gain, net of minority interest, of approximately $106.0 million.

·                 Entered into an agreement to sell 1250 Broadway for $310.0 million, which is expected to generate an incentive fee of at least $15.0 million upon consummation of the sale.  The sale, which is subject to customary closing conditions, is expected to close in the second quarter of 2008.

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·                 Received $29.7 million in dividends and fees from our investment in, and management arrangements with, Gramercy Capital Corp. (NYSE: GKK), or Gramercy, including a $2.5 million incentive fee earned during the quarter and a special dividend of $15.2 million.

·                 Acquired $58.4 million of the Company’s common stock since January 1, 2008 at an average share price of $83.89 pursuant to its previously announced $300.0 million stock repurchase program.  The Company has now acquired $209.1 million of its common stock.

·                 Increased 2008 annual guidance from $6.10-$6.20 of FFO per share to $6.20-$6.25 of FFO per share.

Summary

New York, NY, April 21, 2008 - SL Green Realty Corp. (NYSE:  SLG) today reported funds from operations available to common stockholders, or FFO, of $87.9 million, or $1.44 per share (diluted), for the first quarter ended March 31, 2008, a 29.1% decrease compared to the same quarter in 2007, which was $2.03 per share (diluted).  The 2007 results included an incentive distribution of $77.2 million ($1.27 per share diluted) from the sale of One Park Avenue.

Net income available to common stockholders totaled $125.9 million, or $2.14 per share (diluted), for the quarter ended March 31, 2008, a decrease of $21.5 million compared to the respective period in 2007 which was $2.53 per share (diluted).

Operating and Leasing Activity

For the first quarter of 2008, the Company reported revenues and EBITDA of $272.7 million and $167.6 million, respectively, decreases of $13.2 million, or 4.6%, and $10.1 million, or 5.7%, respectively, compared to the same period in 2007 which included an incentive distribution of $77.2 million ($1.27 per share diluted) from the sale of One Park Avenue.  During the quarter, we had strong leasing activity at 1221 Avenue of the Americas, 711 Third Avenue, 220 East 42^nd Street, 420 Lexington Avenue and 673 First Avenue.  Same-store GAAP NOI on a combined basis increased by 12.2% for the first quarter when compared to the same quarter in 2007, with the consolidated properties increasing 14.2% to $109.7 million during the first quarter and the unconsolidated joint venture properties increasing 5.5% to $30.6 million.

Average starting Manhattan office rents of $62.32 per rentable square foot for the first quarter represented a 43.9% increase over the previously fully escalated rents.

Occupancy for the Manhattan portfolio decreased from 96.6% at December 31, 2007 to 96.3% at March 31, 2008.  During the quarter, the Company signed 51 leases for the Manhattan portfolio totaling 524,213 square feet, with 41 leases and 508,960 square feet representing office leases.

Average starting Suburban office rents of $31.52 per rentable square foot for the first quarter represented a 17.6% increase over the previously fully escalated rents.

Occupancy for the Suburban portfolio decreased modestly from 92.0% at December 31, 2007 to 91.9% at March 31, 2008.  During the quarter, the Company signed 23 leases for

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the Suburban portfolio totaling 177,208 square feet, with 20 leases and 165,386 square feet representing office leases.

Significant leasing activities during the first quarter included:

-                    Early renewal with Crain Communications, Inc. for approximately 98,618 square feet at 711 Third Avenue.

-                    Early renewal with Omnicom Group, Inc. for approximately 55,078 square feet at 220 East 42^nd Street.

-                    New lease with Sirius Satellite Radio, Inc. for approximately 45,295 square feet at 1221 Avenue of the Americas.

-                    New lease with NYU Hospital Center for approximately 43,895 square feet at 673 First Avenue.

-                    New lease with Sonnenschein, Nath & Rosenthal for approximately 43,828 square feet at 1221 Avenue of the Americas.

-                    New lease with The Segal Company for approximately 138,462 square feet at 333 West 34^th Street.

Real Estate Investment Activity

During the first quarter of 2008, the Company invested approximately $30.0 million in new transactions.

Investment activity announced during the first quarter included:

-                    In January 2008, the Company entered into an agreement to sell the 39-story, 670,000 square foot Class A office tower located at 1250 Broadway in Manhattan to Murray Hill Properties for $310.0 million, or approximately $463 per square foot, at a capitalization rate of 4.5%. The partners recapitalized the property in October 2006, with an agreed-upon value of $260.0 million — at which time the Company’s economic stake increased from 54.9% to 66.2% due to the Company’s success in exceeding performance thresholds. The Company expects to recognize an incentive fee of at least $15.0 million upon consummation of the sale.

-                    In February 2008, the Company, through its joint venture with Jeff Sutton, acquired the properties located at 182 Broadway and 63 Nassau Street for approximately $30.0 million.  These properties are located adjacent to 180 Broadway which the joint venture acquired in August 2007.  The joint venture also closed on a $31.0 million loan which bears interest at 225 basis points over the 30-day LIBOR.  The loan has a three year term and two one-year extensions.  The joint venture drew down $21.1 million at the closing.

-                    In January 2008, the Company closed on the sale of 440 Ninth Avenue for $160.0 million.  The sale generated a gain, net of minority interest, of approximately $106.0 million.

Financing and Capital Activity

The Company acquired $58.4 million of its common stock at an average share price of $83.89 since January 1, 2008 pursuant to its previously announced $300.0 million stock

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repurchase program.  The Company has now acquired $209.1 million of its common stock at an average share price of $104.13.

The joint venture that acquired 182 Broadway and 63 Nassau Street closed on a $31.0 million loan which bears interest at 225 basis points over the 30-day LIBOR.  The loan has a three-year term and two one-year extensions.  The joint venture drew down $21.1 million at the closing.

Structured Finance Activity

The Company’s structured finance investments totaled $776.5 million on March 31, 2008, a decrease of approximately $28.7 million from the balance at December 31, 2007. The structured finance investments currently have a weighted average maturity of 6.1 years.  The weighted average yield for the quarter ended March 31, 2008 was 10.6%, compared to a yield of 10.7% for the quarter ended March 31, 2007.

Investment In Gramercy Capital Corp.

At March 31, 2008, the book value of the Company’s investment in Gramercy totaled $158.5 million. Fees earned from various management arrangements between the Company and Gramercy totaled approximately $9.7 million for the quarter ended March 31, 2008, including an incentive fee of $2.5 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 $5.3 million for the three months ended March 31, 2008, compared to $4.9 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, 2008, the Company’s MG&A included approximately $3.5 million, of costs associated with Gramercy compared to $2.4 million in the prior year.

In April 2008, Gramercy closed on its acquisition of American Financial Realty Trust.  The Company participated in $50.0 million of the $850.0 million financing of Gramercy in connection with this acquisition.

Dividends

During the first quarter of 2008, the Company declared quarterly dividends on its outstanding common and preferred stock as follows:

-                    $0.7875 per share of common stock. Dividends were paid on April 15, 2008 to stockholders of record on the close of business on March 31, 2008.

-                    $0.4766 and $0.4922 per share on the Company’s Series C and D Preferred Stock, respectively, for the period January 15, 2008 through and including April 14, 2008. Distributions were made on April 15, 2008 to stockholders of record on the close of business on March 31, 2008. 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, Chief Executive Officer, will host a conference call and audio web cast on Tuesday, April 22, 2008 at 2:00 pm EST to discuss first quarter 2008 financial results. The Supplemental Package will be available prior to the quarterly conference call on the Company’s web site.

The live conference will be webcast in listen-only mode on the Company’s web site at www.slgreen.com and on Thomson’s StreetEvents Network. The conference may also be accessed by dialing (866) 700-6979 Domestic or (617) 213-8836 International, using pass code SL Green.

A replay of the call will be available through Tuesday, April 29, 2008 by dialing (888) 286-8010 Domestic or (617) 801-6888 International, using pass code 63711682.

Supplemental Information

The Supplemental Package outlining first quarter 2008 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, 2008, the Company owned 31 New York City office properties totaling approximately 24,389,200 square feet, making it New York’s largest office landlord. In addition, SL Green holds investment interests in, among other things, nine retail properties encompassing approximately 400,212 square feet, one development property encompassing approximately 85,000 square feet and two land interests, along with ownership interests in 36 suburban assets totaling 7,867,500 square feet in Brooklyn, Queens, Long Island, 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 can be found on page 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, reduced demand for office space, unanticipated increases in financing and other costs, 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, environmental, regulatory and/or safety requirements, 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 filings 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. 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.

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, 2008 that will subsequently be released on Form 10-Q to be filed on or before May 10, 2008.

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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. As of March 31, 2008, SL Green owned approximately 22% 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.

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FINANCIAL RESULTS

Funds From Operations, or FFO, available to common stockholders totaled $87.9 million, or $1.44 per share (diluted) for the first quarter ended March 31, 2008, a 29.1% decrease over the same quarter in 2007 when FFO totaled $123.7 million, or $2.03 per share (diluted).  The 2007 results include an incentive distribution of $77.2 million ($1.27 per share diluted) from the sale of One Park Avenue.

Net income available for common stockholders totaled $125.9 million, or $2.14 per share (diluted) for the first quarter ended March 31, 2008. Net income available to common stockholders totaled $147.4 million or $2.53 per share (diluted) in the same quarter in 2007.

Funds available for distribution, or FAD, for the first quarter of 2008 decreased to $1.00 per share (diluted) versus $1.93 per share (diluted) in the prior year, a 48.2% decrease.

The Company’s dividend payout ratio for the first quarter of 2008 was 54.8% of FFO and 78.5% of FAD before first cycle leasing costs.

All per share amounts are presented on a diluted basis.

CONSOLIDATED RESULTS

Total quarterly revenues totaled $272.3 million in the first quarter compared to $285.9 million in the prior year.  The $13.6 million reduction in revenue resulted primarily from the following items:

The Company’s earnings before interest, taxes, depreciation and amortization, or EBITDA, totaled $167.6 million compared to $177.7 million in the prior year.  After adjusting for the incentive distribution of $77.2 million recognized in 2007, the following items drove EBITDA improvements:

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FFO before minority interests declined $35.8 million primarily as a result of:

SAME-STORE RESULTS

Consolidated Properties

Same-store first quarter 2008 GAAP NOI increased $13.6 million (14.2%) to $109.7 million compared to the prior year.  Operating margins before ground rent increased from 56.78% to 59.16%.

The $13.6 million increase in GAAP NOI was primarily due to:

Joint Venture Properties

The Joint Venture same-store properties first quarter 2007 GAAP NOI increased $1.6 million (5.5%) to $30.6 million compared to the prior year.  Operating margins before ground rent increased from 54.45% to 56.14%.

The $1.6 million increase in GAAP NOI was primarily due to:

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STRUCTURED FINANCE ACTIVITY

As of March 31, 2008, our structured finance and preferred equity investments totaled $776.5 million.  The weighted average balance outstanding for the first quarter of 2008 was $766.6 million.  During the first quarter of 2008 the weighted average yield was 10.6%.

QUARTERLY LEASING HIGHLIGHTS

Manhattan vacancy at December 31, 2007 was 837,174 useable square feet net of holdover tenants.  During the quarter, 317,629 additional useable office, retail and storage square feet became available at an average escalated cash rent of $44.00 per rentable square foot.  Space available to lease during the quarter totaled 1,152,716 useable square feet, or 4.7% of the total Manhattan portfolio.

During the first quarter, 41 Manhattan office leases, including early renewals, were signed totaling 508,960 rentable square feet.  New cash rents averaged $62.32 per rentable square foot.  Replacement rents were 43.9% higher than rents on previously occupied space, which had fully escalated cash rents averaging $43.31 per rentable square foot.  The average lease term was 6.6 years and average tenant concessions were 0.9 months of free rent with a tenant improvement allowance of $11.45 per rentable square foot.

Suburban vacancy at December 31, 2007 was 627,635 usable square feet net of holdover tenants.  During the quarter, 158,275 additional useable office and storage square feet became available at an average escalated cash rent of $26.51 per rentable square foot.  Space available to lease during the quarter totaled 785,910 useable square feet, or 10.0% of the total Suburban portfolio.

During the first quarter, 20 Suburban office leases, including early renewals, were signed totaling 165,386 rentable square feet.  New cash rents averaged $31.52 per rentable square foot.  Replacement rents were 17.6% higher than rents on previously occupied space, which had fully escalated cash rents averaging $26.81 per rentable square foot.  The average lease term was 8.4 years and average tenant concessions were 4.9 months of free rent with a tenant improvement allowance of $24.23 per rentable square foot.

The Company also signed a total of 3 retail and storage leases, including early renewals, for 11,822 rentable square feet.  The average lease term was 5.0 years with no tenant concessions.

REAL ESTATE ACTIVITY

The Company’s share of real estate investment transactions entered into during the first quarter totaled approximately $30.0 million and included:

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Investment In Gramercy Capital Corp.

At March 31, 2008, the book value of the Company’s investment in Gramercy totaled $158.5 million. Fees earned from various management arrangements between the Company and Gramercy totaled approximately $9.7 million for the quarter ended March 31, 2008, including an incentive fee of $2.5 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 $5.3 million for the three months ended March 31, 2008, compared to $4.9 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, 2008, the Company’s MG&A included approximately $3.5 million of costs associated with Gramercy compared to $2.4 million in the prior year.

In April 2008, Gramercy closed on its acquisition of American Financial Realty Trust.  The Company participated in $50.0 million of the $850.0 million financing of Gramercy in connection with this acquisition.

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FINANCING/ CAPITAL ACTIVITY

The Company acquired $58.4 million of its common stock at an average share price of $83.89 since January 1, 2008 pursuant to its previously announced $300.0 million stock repurchase program.  The Company has now acquired $209.1 million of its common stock at an average share price of $104.13.

The joint venture that acquired 182 Broadway and 63 Nassau Street closed on a $31.0 million loan which bears interest at 225 basis points over the 30-day LIBOR.  The loan has a three year term and two one-year extensions.  The joint venture drew down $21.1 million at the closing.

Dividends

On March 12, 2008, the Company declared a dividend of $0.7875 per common share for the first quarter of 2008.  The dividend was payable April 15, 2008 to stockholders of record on the close of business on March 31, 2008.  This distribution reflects the regular quarterly dividend, which is the equivalent of an annualized distribution of $3.15 per common share.

On March 12, 2008, the Company also approved a distribution on its Series C preferred stock for the period January 15, 2008 through and including April 14, 2008, of $0.4766 per share, payable April 15, 2008 to stockholders of record on the close of business on March 31, 2008. 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 12, 2008, the Company also approved a distribution on its Series D preferred stock for the period January 15, 2008 through and including April 14, 2008, of $0.4922 per share, payable April 15, 2008 to stockholders of record on the close of business on March 31, 2008. 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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