20
20
SL GREEN
annual
repor t
S
L
G
R
E
E
N
|
2
0
2
0
A
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SL GREEN REALTY CORP.
One Vanderbilt Avenue
New York, NY 10017
212.594.2700
www.slgreen.com
Financial Highlights
( All data as of 12/31/20 unless otherwise noted)
23
years listed
38.2m
total square feet (1)
$7.11
ffo per share
$3.64
annual dividend
per share
93.4%
$14.5b
manhattan same-store
leased occupancy
enterprise value
$1.6b
88
combined revenues
properties (1)
$1.7b
liquidity (2)
98.1%
collection from
(3)
office tenants
32.6m
shares repurchased
(1) Includes DPE interests.
(2) Includes consolidated cash,
marketable securities and undrawn
capacity on the Company’s
unsecured revolving credit facility;
excludes SLG share of unconsolidated
JV cash and cash equivalents.
(3) Reflects 2020 billed amounts
collected as of 3/31/21.
Corporate Directory
Board of Directors
Executive Officers
Registrar & Transfer Agent
Marc Holliday
Chairman & Chief Executive Officer
Marc Holliday
Chairman & Chief Executive Officer
Andrew W. Mathias
President
Stephen L. Green
Chairman Emeritus
John H. Alschuler, Jr.
Lead Independent Director;
Chair of the Board,
HR&A Advisors Inc.
Edwin T. Burton, III
Professor of Economics,
University of Virginia
John S. Levy
Private Investor
Craig M. Hatkoff
Co-founder, Tribeca Film Festival;
Chairman, Turtle Pond Publications, LLC
Betsy Atkins
CEO & Founder, Baja Corporation
Lauren B. Dillard
Executive Vice President –
Head of Investment Intelligence,
Nasdaq
Andrew W. Mathias
President
Matthew J. DiLiberto
Chief Financial Officer
Andrew S. Levine
Chief Legal Officer,
General Counsel
Counsel
Skadden, Arps, Slate,
Meagher & Flom LLP
New York, NY
Auditors
Ernst & Young LLP
New York, NY
5-Year Total Return to Shareholders
(Includes reinvestment of dividends)
( Based on $100 investment)
$250
200
150
100
50
‘15
‘16
‘17
‘18
‘19
‘20
SL GREEN REALTY CORP. S&P 500 DOW JONES INDUSTRIALS INDEX MSCI U.S. REIT INDEX
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D
Computershare Investor Services
P.O. Box 505000
Louisville, KY 40233-5000
866-230-9138
www.computershare.com/investor
Stock Listing
NYSE Symbol:
SLG, SLG PrI
Investor Relations
One Vanderbilt Avenue
New York, NY 10017
Tel: 212-216-1654
E-mail:
investor.relations@slgreen.com
www.slgreen.com
Annual Meeting
Tuesday, June 8, 2021,
12:00 p.m. ET
The Annual Meeting will
be held remotely.
www.virtualshareholder
meeting.com/SLG2021
Executive Offices
One Vanderbilt Avenue
New York, NY 10017
Tel: 212-594-2700
Fax: 212-216-1785
www.slgreen.com
Table of Contents
Dear Shareholders
For Our Future
One Vanderbilt
One Madison
185 Broadway
760 Madison | 15 Beekman
For Our Community
Food1st
For Our Tenants
SLG Forward
For Our Employees
Returning Safely
For Our Shareholders
2020 Highlights
For Our City
By New Yorkers, For New Yorkers
Map
Portfolio Listing
Form 10-K
Corporate Directory
02
09
13
17
18
21
25
26
29
30
32
34
35
IBC
marc holliday
marc holliday
Chairman & Chief Executive Officer
Chairman & Chief Executive Officer
andrew w. mathias
andrew w. mathias
President
President
Dear Shareholders,
Dear Shareholders,
This is a long-awaited spring of hope and optimism.
This is a Spring of hope and optimism.
After a year defined by lockdowns, closures and restrictions, New York
City is now undergoing a vast reawakening. Businesses, cultural
After months of speculation about the future of New York City office
institutions, schools and live entertainment venues are reopening and
space, we are now seeing tangible signs that our steadfast belief
a new energy level is palpable as hotels, restaurants and retailers welcome
in the city and our portfolio was well-founded. The vaccination
customers back. With 11.5 million vaccine doses administered to
process is underway, indoor activities are beginning to re-open or
New York residents at the time of publication, and every adult in the
expand capacity, and anticipated stimulus support is arriving from
country eligible for vaccination this month, the process of restoring
normalcy to routines that were dislocated by COVID-19 is underway
Washington at record levels. And I am writing to you from our new
and gaining momentum each day.
headquarters at One Vanderbilt, looking out on a city coming back
There are many signs that an unprecedented economic recovery
to life with renewed energy on the streets.
is not far behind. The economic indicators as I write this letter are
truly extraordinary. The S&P 500 closed at a record high, topping the
2020 wasn’t the year that anyone expected or wished for, but as
4,000 level for the first time ever. The national jobs report crushed
we told you last year when COVID-19 first appeared, SL Green is
expectations, with more than 900,000 nonfarm jobs added in March,
a company built to withstand difficult times and quickly pivot to
far beyond the 675,000 expected, leading to a record decline in
growth and strength. We have taken a leadership role throughout
unemployment from 14.8 percent in April 2020 to 6.0 percent today.
the pandemic, helping to ensure that our industry, tenants and city
The federal government has delivered an enormous stimulus package,
were able to withstand this crisis.
“The American Rescue Plan,” that Senator Schumer projects will bring
approximately $100 billion to New York State, including $6 billion in
We are now coming out of this unprecedented year positioned to
direct aid to New York City, $12 billion in direct aid to New York State,
once again be a leader. The moves we have made over the past five
more than $40 billion in aid to small businesses and families, $7 billion
for critical transportation infrastructure and billions more to support
years look increasingly prescient as our streamlined portfolio of
the rapid acceleration of the City’s vaccination program. The long-term
only the very best assets is primed to welcome the coming flight to
view from Washington is also very positive for New York over the next
quality with a strong and growing proportion of new product.
four years as the new administration’s focus on infrastructure bodes
well for the City, with major projects like the Gateway tunnel expected
So we welcome the year ahead cautiously but with great expec-
to gain momentum.
tations. Our portfolio remains well-occupied by industry-leading
The State budget being finalized this month also opens the door to
credit tenants. One Vanderbilt is nearly full and will host the year’s
entirely new industries in the lucrative businesses of cannabis and
most anticipated restaurant opening when Le Pavillon launches
mobile sports betting that will create more economic activity and
later this spring. All of our major development projects are moving
further stimulate the rebound that we expect. On the tourism front,
New York City is already seeing a significant uptick. 36 million visitors
forward on schedule and on budget, and we expect to open Summit
are expected this year, beginning the climb back to record levels
One Vanderbilt, an attraction like no other in the world, just as New
achieved in 2019. NYC & Co. projects that local tourism will return to
York City roars back to life this fall. With demand for elite New York
2019 levels by next year, leisure travel by 2023, and that overall tourism
investment assets still strong, interest rates at historic lows and the
will actually exceed 2019’s record numbers by 2024.
debt markets perfectly positioned, we expect to be active in the
When you put it all together — stimulus just now hitting the economy,
market – disposing of mature assets, refinancing key aspects of our
jobs numbers rising dramatically, 3 to 4 consecutive months of growth,
portfolio and continuing to buy back our undervalued stock.
the City reopening in earnest, tourists returning, historically low interest
rates — job creation could really ignite the economy and spark a
New York City is poised for a comeback and SL Green is positioned
recovery that is far faster than anyone predicted just months ago.
In fact, the City of New York is now projecting that office-using jobs
to lead the way.
will return to pre-COVID levels by the end of this year, which would
be truly remarkable given what we’ve endured over the past year.
2020: A Year for Leadership
So we welcome the year ahead cautiously but with great expectations.
Looking back at 2020, we are incredibly proud of the entire SL
As I look out from our new headquarters at One Vanderbilt Avenue, I can’t
help but be so very proud of the manner in which SL Green contributed to
Green team and what we achieved together in the face of great
keeping the wheels of the City turning during the worst of the pandemic,
uncertainty and disruption.
and the ways in which we contributed to help accelerate the safe and
healthy return to the office workplace. 2020 wasn’t the year that anyone
While others watched events unfold, we sprung into immediate
expected or wished for, but as we told you last year when COVID-19 first
action:
appeared, SL Green is a company built to withstand difficult times and
quickly pivot to seizing upon market opportunities. We have taken a highly
•
visible leadership role throughout the pandemic, helping to ensure
that our industry, tenants and City were able to withstand this crisis.
•
•
We are now coming out of this unprecedented period positioned
•
to once again be at the forefront of helping the City move for-
ward and reestablish the trajectory it was on prior to COVID. Our
For our tenants and essential workers
For our employees
For our investors
And for our city
portfolio remains well-occupied by industry-leading credit tenants.
We then quickly turned our focus to supporting the City where we have
One Vanderbilt continues to fill and will host the year’s most antic-
built our entire business.
ipated restaurant opening when Le Pavillon opens to the public on
May 19. All of our major development projects, which never ceased
during the lockdowns, are moving forward on schedule and on budget,
and we eagerly anticipate the opening of Summit One Vanderbilt, a
mind-blowing destination attraction like no other in the world, just as
New York City roars back to life this fall!
We started with our tenants who were hit the hardest by the pandemic.
In a lot of respects, we were well-positioned for what happened in
2020 — our portfolio is largely made up of big, well-capitalized, credit
tenants on long-term leases, which by design puts us in a better place than
other real estate sectors that are really feeling the brunt of the pandemic.
However, there is a segment of our tenant portfolio that was traumatized,
With demand for elite New York investment assets still strong,
notably small businesses, small retailers and the restaurant industry.
borrowing rates at historic lows and the debt markets well positioned,
we expect to be active in the market — disposing of mature assets,
refinancing key aspects of our portfolio, continuing to buy back our
undervalued stock, and developing iconic properties for the future.
New York City is poised for a legendary comeback, and SL Green is
positioned to greatly benefit from Manhattan’s revival.
2020: A Year for Leadership
Looking back at 2020, we are incredibly proud of the entire SL Green
team and what we achieved together in the face of great uncertainty
and disruption.
While others watched events unfold, we sprang into immediate action:
• For our tenants and essential workers
• For our employees
• For our investors
• And for our City
Our first priority was ensuring the health and safety of our people and
buildings, which led to the creation and implementation of our SL Green
Forward program. SL Green Forward established new operating pro-
cedures and protocols for our buildings, combined with infrastructure
upgrades, to achieve highest possible levels of safety and wellness.
While office buildings may not be inherently essential, many of the busi-
nesses, organizations and agencies that work in our portfolio are critical to
keeping this City running — medical offices, health care companies, visiting
nurses, major media outlets and broadcast studios, and governmental
agencies all have offices in our buildings. These tenants didn’t have the
option of working from home; they were the people on the front line who
needed assurances that they could operate in buildings that were open,
operating, secure, serviced and free from COVID-19. I am proud to say that
for these businesses and essential workers, SL Green never closed its doors.
The next order was taking care of our own — both our front-line building
staff and our corporate employees. In that regard, at first we encouraged
most of our employees to stay home, but after about 10 weeks, what
we knew instinctively became apparent — we are at our best when
we’re working together in our headquarters offices, collaborating,
being together, maximizing productivity. So on June 15 we made the
decision to bring all of our employees back, becoming one of, if not
the first, company back to 100 percent work from office, a level we
have been at ever since. For us, that set the stage for everything we
went on to accomplish in 2020.
We recognized our responsibility to employees and their families
to return to the office smartly and safely, and to address the unique
hardships people had to deal with during this time. So we established
a series of incentives to address the challenges of this pandemic in a
100 percent work from office environment. We provided discounted
commuting, daily meals delivered to desks, subsidized in-home child-
care and notably, the creation of a remote learning center for children
of employees. Our extraordinary team responded, working overtime
with a sense of purpose and urgency.
So our objective was to try to maintain the status quo with tenants that
could afford it, and work with those struggling tenants that couldn’t
to help them make it through these tough times. For our small retailers,
we offered deferral and abatement deals to help them buy time toward
recovery. For small businesses that were suffering, like many of the
companies we house at Graybar, we tried to bring relief by exchanging
free rent for short-term extensions. At the same time, we held the line
with big, national retailers who could afford to meet their obligations yet
sought to take advantage of the situation, litigating where necessary.
But we hatched our most creative idea with our long-time partner and
friend, renowned Chef Daniel Boulud. In April we had a moment with
Chef where it all came together — an opportunity to help the food industry,
small businesses and food-insecure New Yorkers. That idea became
FOOD1ST, a nonprofit foundation that has already provided over
600,000 free nutritious meals to frontline medical personnel, first
responders, and the many food-insecure New Yorkers. The organization
has helped many in the hard-hit restaurant industry reopen their kitchens
and reemploy staff who had been laid off due to closures — the manage-
ment, supervision, organization and logistics of which are managed
entirely by SL Green at no charge.
Our biggest contribution to New York City this year may have been
what we did with our balance sheet. At a time when activity was all but
frozen, we weren’t just active in the market — we made the market.
We showed there was still domestic and global demand for investment
sales with $2 billion of dispositions at very competitive pricing. We
brought $1.75 billion of global capital to the City at One Madison.
We took in new properties in the right circumstances, like the iconic
Lipstick Building and 590 Fifth Avenue. And most importantly, we
continued to invest in New York in ways that create long-term value
for the Company and generate desperately needed, good-paying jobs
for New Yorkers in the immediate term.
There is no greater example of this than the completion of
One Vanderbilt on September 14 — ahead of schedule and below
budget. Just two weeks after the One Vanderbilt ribbon cutting, we
were atop 185 Broadway for the on-time topping out of the project,
which is the first new residential construction in downtown being built
under the Affordable New York Housing Program. And just blocks
away, SL Green commenced demolition of 15 Beekman Street for a
fully-committed development project for Pace University.
We wrapped up the year by getting the One Vanderbilt band back together
to celebrate the commencement of construction at One Madison Avenue
in November. As One Vanderbilt comes to fruition, we will again be putting
thousands of people to work in Midtown South, creating the single best
building in what has been New York’s hottest office submarket.
All of our transactional activity was executed within the overlay of a
$1 billion liquidity plan that we laid out in the spring, which has ensured
our ongoing stability, reduced corporate indebtedness, increased cash
reserves and enabled us to continue our share repurchase program at
very attractive pricing levels.
SL GREEN ANNUAL REPORT 2020
| 3
210412_SLG_AR2020_Letter_r1.indd 2-3
210412_SLG_AR2020_Letter_r1.indd 2-3
4/13/21 8:11 AM
4/13/21 8:11 AM
FPO marc holliday
Chairman & Chief Executive Officer
andrew w. mathias
President
Dear Shareholders,
This is a long-awaited spring of hope and optimism.
After a year defined by lockdowns, closures and restrictions, New York
City is now undergoing a vast reawakening. Businesses, cultural
institutions, schools and live entertainment venues are reopening and
a new energy level is palpable as hotels, restaurants and retailers welcome
customers back. With 11.5 million vaccine doses administered to
New York residents at the time of publication, and every adult in the
country eligible for vaccination this month, the process of restoring
normalcy to routines that were dislocated by COVID-19 is underway
and gaining momentum each day.
There are many signs that an unprecedented economic recovery
is not far behind. The economic indicators as I write this letter are
truly extraordinary. The S&P 500 closed at a record high, topping the
4,000 level for the first time ever. The national jobs report crushed
expectations, with more than 900,000 nonfarm jobs added in March,
far beyond the 675,000 expected, leading to a record decline in
unemployment from 14.8 percent in April 2020 to 6.0 percent today.
The federal government has delivered an enormous stimulus package,
“The American Rescue Plan,” that Senator Schumer projects will bring
approximately $100 billion to New York State, including $6 billion in
direct aid to New York City, $12 billion in direct aid to New York State,
more than $40 billion in aid to small businesses and families, $7 billion
for critical transportation infrastructure and billions more to support
the rapid acceleration of the City’s vaccination program. The long-term
view from Washington is also very positive for New York over the next
four years as the new administration’s focus on infrastructure bodes
well for the City, with major projects like the Gateway tunnel expected
to gain momentum.
The State budget being finalized this month also opens the door to
entirely new industries in the lucrative businesses of cannabis and
mobile sports betting that will create more economic activity and
further stimulate the rebound that we expect. On the tourism front,
New York City is already seeing a significant uptick. 36 million visitors
are expected this year, beginning the climb back to record levels
achieved in 2019. NYC & Co. projects that local tourism will return to
2019 levels by next year, leisure travel by 2023, and that overall tourism
will actually exceed 2019’s record numbers by 2024.
When you put it all together — stimulus just now hitting the economy,
jobs numbers rising dramatically, 3 to 4 consecutive months of growth,
the City reopening in earnest, tourists returning, historically low interest
rates — job creation could really ignite the economy and spark a
recovery that is far faster than anyone predicted just months ago.
In fact, the City of New York is now projecting that office-using jobs
will return to pre-COVID levels by the end of this year, which would
be truly remarkable given what we’ve endured over the past year.
So we welcome the year ahead cautiously but with great expectations.
As I look out from our new headquarters at One Vanderbilt Avenue, I can’t
help but be so very proud of the manner in which SL Green contributed to
keeping the wheels of the City turning during the worst of the pandemic,
and the ways in which we contributed to help accelerate the safe and
healthy return to the office workplace. 2020 wasn’t the year that anyone
expected or wished for, but as we told you last year when COVID-19 first
appeared, SL Green is a company built to withstand difficult times and
quickly pivot to seizing upon market opportunities. We have taken a highly
visible leadership role throughout the pandemic, helping to ensure
that our industry, tenants and City were able to withstand this crisis.
We are now coming out of this unprecedented period positioned
to once again be at the forefront of helping the City move for-
ward and reestablish the trajectory it was on prior to COVID. Our
ple and buildings, which led to the creation and implementation
portfolio remains well-occupied by industry-leading credit tenants.
Our first priority was ensuring the health and safety of our peo-
One Vanderbilt continues to fill and will host the year’s most antic-
ipated restaurant opening when Le Pavillon opens to the public on
May 19. All of our major development projects, which never ceased
of our SL Green Forward program. SL Green Forward estab-
during the lockdowns, are moving forward on schedule and on budget,
lished new operating procedures and protocols for our build-
and we eagerly anticipate the opening of Summit One Vanderbilt, a
ings, combined with infrastructure upgrades, to achieve highest
mind-blowing destination attraction like no other in the world, just as
New York City roars back to life this fall!
possible levels of safety and wellness.
With demand for elite New York investment assets still strong,
While office buildings may not be inherently essential, many
borrowing rates at historic lows and the debt markets well positioned,
of the businesses, organizations and agencies that work in
we expect to be active in the market — disposing of mature assets,
our portfolio are critical to keeping this city running – medical
refinancing key aspects of our portfolio, continuing to buy back our
offices, health care companies, visiting nurses, major media out-
undervalued stock, and developing iconic properties for the future.
New York City is poised for a legendary comeback, and SL Green is
lets and broadcast studios, and governmental agencies all have
positioned to greatly benefit from Manhattan’s revival.
offices in our buildings. These tenants don’t have the option of
2020: A Year for Leadership
working from home; they are the people on the front line who
need assurances that they can operate in buildings that are
Looking back at 2020, we are incredibly proud of the entire SL Green
open, operating, secure, serviced and free from COVID-19. I am
team and what we achieved together in the face of great uncertainty
and disruption.
proud to say that for these businesses and essential workers, SL
Green never closed its doors.
While others watched events unfold, we sprang into immediate action:
The next order was taking care of our own – both our front-line
• For our tenants and essential workers
• For our employees
• For our investors
• And for our City
building staff and our corporate employees. In that regard, at
first we encouraged most of our employees to stay home, but
after about 10 weeks, what we knew instinctively became appar-
Our first priority was ensuring the health and safety of our people and
ent – we are at our best when we’re working together in our
buildings, which led to the creation and implementation of our SL Green
Headquarters offices, collaborating, being together, maximizing
Forward program. SL Green Forward established new operating pro-
productivity. So on June 15 we made the decision to bring all of
cedures and protocols for our buildings, combined with infrastructure
upgrades, to achieve highest possible levels of safety and wellness.
our employees back, becoming one of if not the first company
accomplish this year.
We recognized our responsibility to employees and their families
back to 100% work from office, a level we have been at ever
While office buildings may not be inherently essential, many of the busi-
since. For us, that set the stage for everything we went on to
nesses, organizations and agencies that work in our portfolio are critical to
keeping this City running — medical offices, health care companies, visiting
nurses, major media outlets and broadcast studios, and governmental
agencies all have offices in our buildings. These tenants didn’t have the
option of working from home; they were the people on the front line who
to do it smartly and safely, and to address the unique hardships
needed assurances that they could operate in buildings that were open,
people had to deal with during this time. So we established a
operating, secure, serviced and free from COVID-19. I am proud to say that
series of incentives to address the challenges of this pandemic in
for these businesses and essential workers, SL Green never closed its doors.
a 100% work from office environment. We provided discounted
The next order was taking care of our own — both our front-line building
commuting, daily meals delivered to desks, subsidized in-home
staff and our corporate employees. In that regard, at first we encouraged
childcare and notably, the creation of a remote learning center
most of our employees to stay home, but after about 10 weeks, what
we knew instinctively became apparent — we are at our best when
for children of employees. Our extraordinary team responded,
we’re working together in our headquarters offices, collaborating,
being together, maximizing productivity. So on June 15 we made the
decision to bring all of our employees back, becoming one of, if not
We then quickly turned our focus to supporting the city where
the first, company back to 100 percent work from office, a level we
have been at ever since. For us, that set the stage for everything we
went on to accomplish in 2020.
working overtime with a sense of purpose and urgency.
we have built our entire business.
We started with our tenants who were hit the hardest by the
We recognized our responsibility to employees and their families
pandemic. In a lot of respects we were well-positioned for what
to return to the office smartly and safely, and to address the unique
happened this year -- our portfolio is largely made up of big,
hardships people had to deal with during this time. So we established
well-capitalized, credit tenants on long-term leases, which by
a series of incentives to address the challenges of this pandemic in a
100 percent work from office environment. We provided discounted
design puts us in a better place than other real estate sectors
commuting, daily meals delivered to desks, subsidized in-home child-
that are really feeling the brunt of this. However, there is a seg-
care and notably, the creation of a remote learning center for children
ment of our tenant portfolio that was traumatized, notably small
of employees. Our extraordinary team responded, working overtime
with a sense of purpose and urgency.
businesses, small retailers and the restaurant industry.
We then quickly turned our focus to supporting the City where we have
So our objective was to try to maintain the status quo with tenants
built our entire business.
that could afford it, and work with sectors that couldn’t to help
We started with our tenants who were hit the hardest by the pandemic.
them make it through these tough times. For our small retailers,
In a lot of respects, we were well-positioned for what happened in
we offered deferral and abatement deals to help them buy time
2020 — our portfolio is largely made up of big, well-capitalized, credit
toward recovery. For small businesses that were suffering, like many
tenants on long-term leases, which by design puts us in a better place than
other real estate sectors that are really feeling the brunt of the pandemic.
of the companies we house at Graybar, we tried to bring relief by
However, there is a segment of our tenant portfolio that was traumatized,
exchanging free rent for short-term extensions. At the same time,
notably small businesses, small retailers and the restaurant industry.
we held the line with big, national retailers who could afford to
So our objective was to try to maintain the status quo with tenants that
meet their obligations, litigating where necessary to hold them to
could afford it, and work with those struggling tenants that couldn’t
their obligations.
to help them make it through these tough times. For our small retailers,
we offered deferral and abatement deals to help them buy time toward
But we hatched our most creative idea with our long-time partner
recovery. For small businesses that were suffering, like many of the
and friend, renowned Chef Daniel Boulud. In April we had a moment
companies we house at Graybar, we tried to bring relief by exchanging
with Chef where it all came together – an opportunity to help the
free rent for short-term extensions. At the same time, we held the line
with big, national retailers who could afford to meet their obligations yet
food industry, small businesses and food insecure New Yorkers.
sought to take advantage of the situation, litigating where necessary.
That idea became FOOD1ST, a non-profit foundation providing free
But we hatched our most creative idea with our long-time partner and
nutritious meals to frontline medical personnel, first-responders,
friend, renowned Chef Daniel Boulud. In April we had a moment with
and the many food-insecure New Yorkers. The organization has
Chef where it all came together — an opportunity to help the food industry,
helped many in the hard-hit restaurant industry reopen their kitch-
small businesses and food-insecure New Yorkers. That idea became
ens and re-employ staff who had been laid-off due to closures. The
FOOD1ST, a nonprofit foundation that has already provided over
management, supervision, organization and logistics of which are
600,000 free nutritious meals to frontline medical personnel, first
managed entirely by SL Green at no charge.
responders, and the many food-insecure New Yorkers. The organization
has helped many in the hard-hit restaurant industry reopen their kitchens
and reemploy staff who had been laid off due to closures — the manage-
Our biggest contribution to New York City this year may have been
ment, supervision, organization and logistics of which are managed
what we did with our balance sheet. At a time when activity was all
entirely by SL Green at no charge.
but frozen, we weren’t just active in the market – we made the market.
Our biggest contribution to New York City this year may have been
what we did with our balance sheet. At a time when activity was all but
We showed there was still domestic and global demand for invest-
frozen, we weren’t just active in the market — we made the market.
ment sales with $1.7 billion of dispositions at very competitive
We showed there was still domestic and global demand for investment
pricing. We brought over $2.5 billion of global capital to the city for
sales with $2 billion of dispositions at very competitive pricing. We
JV investment at One Madison. We acquired new properties in the
brought $1.75 billion of global capital to the City at One Madison.
right circumstance, like the iconic Lipstick Building and 590 Fifth
We took in new properties in the right circumstances, like the iconic
Avenue. And most importantly, we continued to invest in New York
Lipstick Building and 590 Fifth Avenue. And most importantly, we
in ways that create long-term value for the Company and gener-
continued to invest in New York in ways that create long-term value
ate desperately needed, good-paying jobs for New Yorkers in the
for the Company and generate desperately needed, good-paying jobs
for New Yorkers in the immediate term.
immediate term.
There is no greater example of this than the completion of
There is no greater example of this than the completion of One
One Vanderbilt on September 14 — ahead of schedule and below
budget. Just two weeks after the One Vanderbilt ribbon cutting, we
Vanderbilt on September 14 – ahead of schedule and below budget.
were atop 185 Broadway for the on-time topping out of the project,
Just two weeks after the One Vanderbilt ribbon cutting, we were
which is the first new residential construction in downtown being built
atop 185 Broadway for the on-time topping out of the project which
under the Affordable New York Housing Program. And just blocks
is the first new residential construction in downtown being built
away, SL Green commenced demolition of 15 Beekman Street for a
under the Affordable New York Housing Program.
fully-committed development project for Pace University.
And just blocks away, SL Green commenced demolition of 15
We wrapped up the year by getting the One Vanderbilt band back together
Beekman Street for a fully-committed development project for
to celebrate the commencement of construction at One Madison Avenue
Pace University.
in November. As One Vanderbilt comes to fruition, we will again be putting
thousands of people to work in Midtown South, creating the single best
building in what has been New York’s hottest office submarket.
We wrapped up the year by getting the One Vanderbilt band back
together to celebrate the commencement of construction at One
All of our transactional activity was executed within the overlay of a
Madison Avenue last month. As One Vanderbilt wraps up, we will
$1 billion liquidity plan that we laid out in the spring, which has ensured
our ongoing stability, reduced corporate indebtedness, increased cash
again be putting thousands of people to work in Midtown South,
reserves and enabled us to continue our share repurchase program at
creating the single best building in what has been New York’s hot-
very attractive pricing levels.
test sub-district.
SL GREEN ANNUAL REPORT 2020
SL GREEN ANNUAL REPORT 2020
| 3
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FPOFPO No firm has done more to set a robust example for dedication to
All of our transactional activity was executed within the overlay of
New York, dedication to small business, to people in need, to our
a $1 billion liquidity plan that we laid out in the spring, which has
employees, to our tenants and to our shareholders. SL Green worked
ensured our ongoing stability, reduced corporate indebtedness,
through this pandemic to help keep essential parts of the City
running, to create jobs and to support New Yorkers.
increased cash reserves and enabled us to continue our share repur-
chase program at very attractive pricing levels.
Evolution of Office Demand Drivers
Now it’s time to look ahead.
No firm has done more to set a robust example for dedication
After months of speculation about the future of office usage, as we turn
to New York, dedication to small business, to people in need, to
the corner on the pandemic, we are seeing companies across industries
our employees and to our tenants. SL Green worked through this
recognize the need to get their employees back to the office to maxi-
pandemic to help keep essential parts of the City running, to create
mize productivity, enable mentoring and teambuilding, foster creativity
jobs and to support New Yorkers.
and reinforce corporate culture. Amazon may have said it best: “Our
plan is to return to an office-centric culture as our baseline. We believe it
The Outlook of New York
enables us to invent, collaborate, and learn together most effectively.”
In a survey of 350 CEOs and human resources and finance leaders,
Now it’s time to look ahead. As the weather warms up here in New
70 percent said they plan to have employees back in the office by fall of
York there are many signs that life is going to move back toward
this year. A separate survey conducted by KPMG found that com-
normal in the months ahead.
panies are rapidly backing away from plans to reduce office space; only
17 percent of CEOs surveyed in March said they planned to downsize,
While we have shown for more than 9 months that it is already safe
compared with 69 percent last August.
to work from the office, we now know that a substantial return to
We have every reason to believe those numbers will continue to trend
normal office usage will only occur when a significant portion of the
in the right direction as some of the biggest employers in the City
and nation show leadership. Google has announced plans for the
population is vaccinated. The excellent news is that the vaccination
reopening of its offices this month and expects most employees back
process is well underway and ramping up quickly, with President
by September 1. Facebook will begin reopening in May, Bloomberg
Biden projecting that all Americans will be eligible for vaccination
expects their employees to return as soon as they are vaccinated, and
by May 1. The State and City have been working hard to set up more
Wells Fargo is targeting September 6 as its back-to-office date. The
vaccine locations, including 24-hour venues in the City. And the
public sector is headed in the same direction, with 80,000 New York
City municipal workers coming back on May 3.
CDC recently released guidance that it is safe for vaccinated people
to interact indoors without masks. All of the business leaders that
While certain employers will experiment with a Hybrid Workplace
we speak with regularly are eager to return to the office and we
Model, giving employees the ability to work from home periodically, I
believe this will be more limited in practice, especially over time. As
believe that when vaccination reaches critical mass among office
businesses vie to compete to succeed in New York City, companies
workers that we will see significant numbers back for the first time
that work in purpose-built, efficient and fully amenitized space will
since last March.
foster a better workplace environment than those that experience
culture and brand dilution through work from home.
At the time of writing we are already seeing restrictions loosened
When businesses come back to the office this year, though, there will
and many core aspects of life in New York City beginning to return.
be new preferences and trends that we believe will put SL Green at a
Over the past month arenas have re-opened at 10 percent capacity,
significant advantage moving forward. In a post-COVID world, com-
indoor dining has increased to 50 percent capacity, movie theaters
panies and workers will flock to space that combines some of the
re-opened for the first time at 50 percent capacity and the MTA
comfort of working from home with amenities only possible in an office
environment. I expect the following features to be in high demand,
extended overnight subway service, with ridership reaching its high-
all of which are prominent in our portfolio:
est levels since the onset of the pandemic. INSERT DATA on condo
• A one-seat ride: Businesses will choose to locate in areas of the City
sales, multifamily booming again as people return in preparation…
that offer the most modes of “one-stop” commutation options to limit
commute times. Midtown is perfectly situated, especially with the
The new administration in Washington – and the increased influence
Long Island Rail Road making its debut at Grand Central Terminal as
of New York’s federal delegation – has already begun to deliver
early as next year, offering even more one-seat options.
relief for the City. The recently passed $1.9 trillion stimulus package
• State-of-the-art space: New construction and heavily redeveloped
helps New York in too many ways to list here, from vitally needed
space will be the big winners as businesses stretch to provide employ-
support for our transportation systems to help for small businesses
ees with ultramodern work environments to recruit and retain talent.
and workers who have struggled to stay afloat over the past year.
• Healthy, safe and WELL environments: This item has moved to the
The long-term view is also very positive for New York over the next
top of the list for many companies post-COVID and is another area
four years as the Biden administration’s focus on infrastructure
where new construction will thrive. Through substantial investment of
bodes well for the city, with major projects like the Gateway tunnel
expected to gain momentum.
capital, buildings can obtain high levels of air filtration, water quality,
This all adds up to what we hope and anticipate will be a “snap-
air and water monitoring and passive thermal imaging to promote
back” recovery where economic indicators return to pre-pandemic
employee health and give them more energy at work.
levels quickly instead of more gradually. In addition to the good
• Amenities not available at home: More than ever, companies will
news on vaccines and support from Washington, there are a number
seek to provide their employees with forward-thinking amenities that
of indicators and ingredients that point in this direction.
provide a lifestyle enhancement and encourage collaboration not pos-
sible remotely. Large-format gathering spaces for town hall meetings,
The City of New York is now projecting that office-using jobs will
wired training centers, upscale food and beverage offerings, employee
lounges, outdoor spaces and wellness centers will all be must-have
return to pre-COVID levels by 2022, fueled in part by record Wall
items for returning workers.
Street profits in 2020. Prior to COVID, tourism in New York was at
record levels. While that industry has been devastated, we have
• High-tech workplaces: Companies will demand access to redundant
sources of high-speed and powerful networking to avoid the short-
every reason to believe that there is now pent-up demand for
comings of inferior, unreliable and inconsistent home networks.
regional, national and global travel that will support strong and
• Flexible office space: SL Green is introducing Altus Suites to satisfy
rapid recovery when travel restrictions are further reduced and
companies’ desire for flexible, fully furnished office space with high
eventually eliminated.
level of service and amenity in WELL buildings.
INSERT ANY MORE DATA ON RECOVERY METRICS
• A new approach to hospitality: SL Green started a Hospitality
Division in 2020 in order to provide tenants with a level of service
The Year Ahead for SL Green
on par with 4-star hotels and fine restaurants to manage the needs
of tenants and their employers outside of the traditional building
The combination of this company’s active, market-leading and
management responsibilities.
almost unprecedented response to COVID, along with the many
From the beginning of the pandemic, we rejected the often hysterical
indicators of New York’s impending recovery suggest that 2021 will
claims about a remote work future. There is no substitute for the office
environment, and the past year has only led to more innovation and
be a year full of milestones for the city and SL Green.
creativity around what can be achieved in that space, which workers
will enjoy when they return in the coming weeks and months. With
For us, the future is about new development, and it all starts with
CEOs rapidly making plans to bring workers back, and our portfolio
our new home, One Vanderbilt Avenue. We continued to sign new
now focused even more on premium, state-of-the-art Manhattan
leases at One Vanderbilt throughout the pandemic as industry-lead-
properties, I am more confident than ever that we are headed for a
ing companies recognized the long-term value of this extraordinary
“snapback” recovery.
building and location. We now sit at nearly 7X percent leased, with
The Year Ahead for SL Green
XX square feet of potential deals trading paper. The momentum
New York’s reopening is underway, and there are early signs of an
on One Vanderbilt will continue throughout the year, first with the
unexpected early recovery beginning in the second half of this year.
opening of Daniel Boulud’s Le Pavillon in May and then with a signif-
Within weeks, the majority of the population in New York will have
icant refinancing expected this summer that will repatriate all of our
been vaccinated, and COVID-19 will be on the retreat. Companies
equity in this asset.
will begin returning to the office in time to help struggling restau-
rants, retailers and small businesses get back on their feet. Domestic
visitors will define the local tourism business driven by Americans’
The market has made clear that new construction that is well
desire to travel, while Europe and other traditional summer desti-
designed and amenitized in the right parts of the city can almost
nations remain closed. Many of Manhattan’s hotels have set May and
defy gravity. This applies equally to One Madison Avenue, where
June as their reopening dates, and new projects like the Aman Hotel
we commenced construction during the pandemic and achieved a
on 57th Street, the Ritz Carlton in Nomad, and the Hard Rock Hotel
remarkable $65 million of cost savings in a great environment for
in Times Square, along with several others, will contribute an equal
amount of new rooms to inventory to those permanently lost to
contract bidding. We are seeing intense early interest in the first
COVID-related closures.
true new construction in Midtown South in a decade. One Madison
represents exactly what companies are looking for post-COVID, a
The multiplier effect of more than $100 billion of new, local stimulus, and
continued low interest rates will have an uplifting effect on New York’s
state-of-the-art building that prioritizes wellness located right on
economy and accelerate job re-creation predicted to get back to pre-
one of the city’s premier open spaces, Madison Square Park. Best of
pandemic levels in 2022. This economic climate will set the stage for
all, this asset will come on line at a time when we expect demand to
SL Green’s outperformance against its peers, as our market-leading
be strong and with little comparable competition.
approach to continuous investment and divestment generates strong
capital gains and excess proceeds to repurchase stock and retire
Another well-timed project, 185 Broadway, will make its debut this
company indebtedness.
year, beginning residential leasing in July just as we anticipate the
For us, the future is about world-class new development, and it all
multi-family market to be recovering and hitting its stride as people
starts with our new home, One Vanderbilt Avenue, which we moved
into in March of this year. Throughout the pandemic, we continued to
sign new leases at One Vanderbilt — eight of them to be exact — as
Perhaps our most exciting milestone of the upcoming year will take place
industry-leading companies embraced the compelling attributes
at the top of One Vanderbilt when we open Summit One Vanderbilt.
of this extraordinary building, location, design and amenities. We
While we gave a sneak peek of the Summit at our Investor Conference
have now reached nearly 75 percent leased, while we trade paper
in December, the fully completed cultural destination will change the
on another 225,000 square feet of potential deals which, if signed as
way people experience the City and the environment in an immersive
anticipated, would bring our leased occupancy to nearly 90 percent.
experience that we believe will achieve global prominence. Summit
The momentum at One Vanderbilt will continue throughout the year,
One Vanderbilt will be opening to the public right after the summer and
with a significant refinancing expected this summer that will repatriate
offer visitors the opportunity to escape the constraints of lockdown and
substantially all of our equity in this asset with expected proceeds
be among the first to visit this multi-sensorial attraction that will rise right to
of up to $1.0 billion in excess of our original underwriting. We have
the top of the most desired and visited sites in Manhattan when it opens.
already executed $2.25 billion of 10-year fixed rate forward swaps in
anticipation of a second quarter refinancing in excess of the swapped
amount. The substantial completion of the leasing of One Vanderbilt,
along with the expected closing of one of the largest single-asset office
financings in history, will cap off this enormously successful investment
for SL Green and illuminate the extraordinary value creation that took
place from the ground up.
With all of this activity and pipeline of opportunity, we remain an
undervalued company, notwithstanding our strong stock performance
year-to-date. At times in 2020, the disconnect was extreme, trading at
lows of $35 per share. While our share price has recovered significantly
from the depths of the pandemic, there remains a significant delta
to our estimate of net asset value. What we’ve done in response is
unprecedented within our industry, completing nearly $2.9 billion of
The demand for well-located, beautifully designed and highly amenitized
share buybacks and OP unit redemptions. Nobody in the REIT space
new construction is clear and gravity-defying. This same formula
has accomplished anything of that magnitude. We intend to continue
will apply equally to One Madison Avenue, where we commenced
this program so long as we believe our stock remains undervalued.
construction during a ceremony held on a crisp autumn morning
in Madison Square Park and attended by the mayor, other elected
officials and civic leaders. Through smart planning, value engineering
and good timing, we achieved a remarkable $65 million of cost savings
relative to budget as contractors looked to secure future work during
2022–2023, when construction is expected to ebb citywide. I’m pleased
to report that we are seeing intense early interest in the first true new
office construction in Midtown South in a decade. One Madison rep-
resents exactly what companies are looking for post-COVID, a state-
In that regard, we expect to have significant opportunities for
two important reasons: there continues to be a global appetite for
high-quality Manhattan assets, and the debt markets remain favorable
at historically low rates. In 2020, our investment activity accounted for
a sizable amount of all deals transacted in Manhattan, and our accom-
plishments proved the lasting value of desirable Manhattan commercial
real estate assets, with transactions at competitive pricing on
410 Tenth Avenue, 609 Fifth Avenue, The Olivia and many others.
of-the-art building that prioritizes wellness located right on one of the
Fueling this activity is a robust debt market that is searching for yield on
City’s premier open spaces, Madison Square Park. Best of all, this asset
quality assets. In a business like ours, where more than half of the capital
will come on line at a time when we expect demand to be strong and
of every asset is provided by a lender, the abundant availability and low
with little comparable competition.
Another well-timed project, 185 Broadway, will make its debut this
summer, beginning residential leasing in July just as we anticipate the
multi-family market to be recovering and hitting its stride as people
flock back into downtown. Net effective median apartment rent has
begun to show month-to-month stability in 2021 as this March exhib-
Closing
ited the highest number of new lease signings since tracking began
in 2008. We are proud to be delivering a stylish and amenitized new
residential project under the Affordable New York Housing Program
containing 30 percent affordable rental units for working families.
price of debt capital is a stabilizing force in the Manhattan real estate
market and makes us very optimistic for the execution of our business
plan in 2021. Right now, lenders are competing for mortgages by keep-
ing spreads low for 10-year fixed rate product and supporting asset
values. Look for SL Green to be a very active player in this market in 2021.
2020 was a year like no other. We are grateful for your steadfast support
in a time of great uncertainty, and hope that you share our pride in
the leadership and commitment this entire team showed in 2020.
Also in Lower Manhattan, we commenced our third project with Pace
Where we sit today is proof positive that our strategy is working and
University for new dorms, classrooms, a library and a learning center.
will continue to work as the Company becomes leaner, more focused,
The project, located at 15 Beekman Street, is fully capitalized with
better capitalized and represented by only the finest assets in the
debt and joint venture equity, and demolition is well underway.
City. We’re going to keep pushing and performing to the best of our
We are also in a great position this year at 760 Madison Avenue, where
we are partnered with Giorgio Armani on a truly special and unique
boutique condo and retail project. With Landmarks approval in hand,
abilities, and accordingly, the SL Green you know will continue to
outperform our peers and competitors within this market and produce
the most we can for shareholders.
demolition of the existing buildings that occupy the site is underway
On behalf of myself, Andrew Mathias, our leadership team and the
and we are on track to begin marketing condo units in late 2022 or
entire SL Green family who came together in a time of uncertainty,
early 2023, with the historic Madison Avenue neighborhood luxury
thank you for standing with us and sharing our belief in this Company
buyer already returning to the market and looking to smaller, boutique
and New York, the greatest City in the world.
condo projects like this one in a post-COVID era. The broader residen-
tial condo market in New York City is already rebounding as new sale
contracts were at near-record levels in all five boroughs, indicating that
people are returning to the City and taking advantage of price conces-
sions. We have an incredible partner in Giorgio Armani whose 15-year
extended commitment to their flagship location will serve as an anchor
for Madison Avenue’s retail recovery and reinvigoration.
Marc Holliday
Chairman & Chief Executive Officer
4
4
| SL GREEN ANNUAL REPORT 2020
| SL GREEN ANNUAL REPORT 2020
SL GREEN ANNUAL REPORT 2020
| 5
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210412_SLG_AR2020_Letter_r1.indd 4-5
4/13/21 8:11 AM
4/13/21 8:11 AM
FPOFPO No firm has done more to set a robust example for dedication to
capital, buildings can obtain high levels of air filtration, water quality,
New York, dedication to small business, to people in need, to our
air and water monitoring and passive thermal imaging to promote
employees, to our tenants and to our shareholders. SL Green worked
employee health and give them more energy at work.
through this pandemic to help keep essential parts of the City
running, to create jobs and to support New Yorkers.
Evolution of Office Demand Drivers
Now it’s time to look ahead.
• Amenities not available at home: More than ever, companies will
seek to provide their employees with forward-thinking amenities that
provide a lifestyle enhancement and encourage collaboration not pos-
sible remotely. Large-format gathering spaces for town hall meetings,
wired training centers, upscale food and beverage offerings, employee
After months of speculation about the future of office usage, as we turn
lounges, outdoor spaces and wellness centers will all be must-have
the corner on the pandemic, we are seeing companies across industries
items for returning workers.
recognize the need to get their employees back to the office to maxi-
mize productivity, enable mentoring and teambuilding, foster creativity
and reinforce corporate culture. Amazon may have said it best: “Our
plan is to return to an office-centric culture as our baseline. We believe it
enables us to invent, collaborate, and learn together most effectively.”
In a survey of 350 CEOs and human resources and finance leaders,
70 percent said they plan to have employees back in the office by fall of
this year. A separate survey conducted by KPMG found that com-
panies are rapidly backing away from plans to reduce office space; only
17 percent of CEOs surveyed in March said they planned to downsize,
compared with 69 percent last August.
We have every reason to believe those numbers will continue to trend
in the right direction as some of the biggest employers in the City
and nation show leadership. Google has announced plans for the
reopening of its offices this month and expects most employees back
by September 1. Facebook will begin reopening in May, Bloomberg
expects their employees to return as soon as they are vaccinated, and
Wells Fargo is targeting September 6 as its back-to-office date. The
public sector is headed in the same direction, with 80,000 New York
City municipal workers coming back on May 3.
While certain employers will experiment with a Hybrid Workplace
Model, giving employees the ability to work from home periodically, I
believe this will be more limited in practice, especially over time. As
businesses vie to compete to succeed in New York City, companies
that work in purpose-built, efficient and fully amenitized space will
foster a better workplace environment than those that experience
culture and brand dilution through work from home.
When businesses come back to the office this year, though, there will
be new preferences and trends that we believe will put SL Green at a
significant advantage moving forward. In a post-COVID world, com-
panies and workers will flock to space that combines some of the
comfort of working from home with amenities only possible in an office
environment. I expect the following features to be in high demand,
all of which are prominent in our portfolio:
• A one-seat ride: Businesses will choose to locate in areas of the City
that offer the most modes of “one-stop” commutation options to limit
commute times. Midtown is perfectly situated, especially with the
Long Island Rail Road making its debut at Grand Central Terminal as
early as next year, offering even more one-seat options.
• State-of-the-art space: New construction and heavily redeveloped
space will be the big winners as businesses stretch to provide employ-
ees with ultramodern work environments to recruit and retain talent.
• High-tech workplaces: Companies will demand access to redundant
sources of high-speed and powerful networking to avoid the short-
comings of inferior, unreliable and inconsistent home networks.
• Flexible office space: SL Green is introducing Altus Suites to satisfy
companies’ desire for flexible, fully furnished office space with high
level of service and amenity in WELL buildings.
• A new approach to hospitality: SL Green started a Hospitality
Division in 2020 in order to provide tenants with a level of service
on par with 4-star hotels and fine restaurants to manage the needs
of tenants and their employers outside of the traditional building
management responsibilities.
From the beginning of the pandemic, we rejected the often hysterical
claims about a remote work future. There is no substitute for the office
environment, and the past year has only led to more innovation and
creativity around what can be achieved in that space, which workers
will enjoy when they return in the coming weeks and months. With
CEOs rapidly making plans to bring workers back, and our portfolio
now focused even more on premium, state-of-the-art Manhattan
properties, I am more confident than ever that we are headed for a
“snapback” recovery.
The Year Ahead for SL Green
New York’s reopening is underway, and there are early signs of an
unexpected early recovery beginning in the second half of this year.
Within weeks, the majority of the population in New York will have
been vaccinated, and COVID-19 will be on the retreat. Companies
will begin returning to the office in time to help struggling restau-
rants, retailers and small businesses get back on their feet. Domestic
visitors will define the local tourism business driven by Americans’
desire to travel, while Europe and other traditional summer desti-
nations remain closed. Many of Manhattan’s hotels have set May and
June as their reopening dates, and new projects like the Aman Hotel
on 57th Street, the Ritz Carlton in Nomad, and the Hard Rock Hotel
in Times Square, along with several others, will contribute an equal
amount of new rooms to inventory to those permanently lost to
COVID-related closures.
The multiplier effect of more than $100 billion of new, local stimulus, and
continued low interest rates will have an uplifting effect on New York’s
economy and accelerate job re-creation predicted to get back to pre-
pandemic levels in 2022. This economic climate will set the stage for
SL Green’s outperformance against its peers, as our market-leading
approach to continuous investment and divestment generates strong
capital gains and excess proceeds to repurchase stock and retire
For us, the future is about world-class new development, and it all
starts with our new home, One Vanderbilt Avenue, which we moved
into in March of this year. Throughout the pandemic, we continued to
• Healthy, safe and WELL environments: This item has moved to the
company indebtedness.
top of the list for many companies post-COVID and is another area
where new construction will thrive. Through substantial investment of
sign new leases at One Vanderbilt — eight of them to be exact — as
flood back into downtown. Also in Lower Manhattan,
industry-leading companies embraced the compelling attributes
our third deal with Pace University is fully capitalized with
of this extraordinary building, location, design and amenities. We
construction underway.
have now reached nearly 75 percent leased, while we trade paper
on another 225,000 square feet of potential deals which, if signed as
anticipated, would bring our leased occupancy to nearly 90 percent.
We are also in a great position this year at 760 Madison Avenue,
The momentum at One Vanderbilt will continue throughout the year,
where we are partnered with Armani on a truly unique boutique
with a significant refinancing expected this summer that will repatriate
condo and retail project. Demolition is underway and we are on
substantially all of our equity in this asset with expected proceeds
track to begin marketing in late 2022 or early 2023, with the luxury
of up to $1.0 billion in excess of our original underwriting. We have
buyer returning to the market and looking to smaller, boutique
already executed $2.25 billion of 10-year fixed rate forward swaps in
anticipation of a second quarter refinancing in excess of the swapped
condo projects like this one post-COVID. We have an incredible
amount. The substantial completion of the leasing of One Vanderbilt,
partner in Armani whose 15 year commitment will anchor Madison
along with the expected closing of one of the largest single-asset office
Avenue’s recovery and rebirth.
financings in history, will cap off this enormously successful investment
for SL Green and illuminate the extraordinary value creation that took
Perhaps our most exciting milestone of the upcoming year will take
place from the ground up.
place at the top of One Vanderbilt when we open the Summit in
The demand for well-located, beautifully designed and highly amenitized
October. While we gave a sneak peek of the Summit at the Investor
new construction is clear and gravity-defying. This same formula
Conference in December, the real thing is set to shatter even our
will apply equally to One Madison Avenue, where we commenced
own wildest expectations. The Summit will be a new destination
construction during a ceremony held on a crisp autumn morning
in Madison Square Park and attended by the mayor, other elected
experience that will rise right to the top of the most desired
officials and civic leaders. Through smart planning, value engineering
and visited sites in Manhattan when it opens. It is almost unfair to
and good timing, we achieved a remarkable $65 million of cost savings
group it with observation decks because it is a much bigger experi-
relative to budget as contractors looked to secure future work during
ence that will compete head-on with any destination entertainment
2022–2023, when construction is expected to ebb citywide. I’m pleased
in the world.
to report that we are seeing intense early interest in the first true new
office construction in Midtown South in a decade. One Madison rep-
With all of this activity we remain a highly undervalued company. At
resents exactly what companies are looking for post-COVID, a state-
of-the-art building that prioritizes wellness located right on one of the
times in 2020 it was extreme, trading at lows of $35 per share. While
City’s premier open spaces, Madison Square Park. Best of all, this asset
our share price has recovered significantly from the depths of the
will come on line at a time when we expect demand to be strong and
pandemic, there remains a massive delta to our net asset value that
with little comparable competition.
has only grown over the past year. What we’ve done in response is
Another well-timed project, 185 Broadway, will make its debut this
now in unprecedented territory, completing more than $3 billion of
summer, beginning residential leasing in July just as we anticipate the
share buybacks – we are now on a path to shrink share count from a
multi-family market to be recovering and hitting its stride as people
high of 105 million to just under 65 million by the
flock back into downtown. Net effective median apartment rent has
begun to show month-to-month stability in 2021 as this March exhib-
end of the year. No one in the REIT space has accomplished any-
ited the highest number of new lease signings since tracking began
thing of that magnitude. We intend to continue this program so long
in 2008. We are proud to be delivering a stylish and amenitized new
as our stock remains such an undervalued investment.
residential project under the Affordable New York Housing Program
containing 30 percent affordable rental units for working families.
In that regard we expect to have significant opportunities for two
Also in Lower Manhattan, we commenced our third project with Pace
important reasons: there continues to be a deep appetite for
University for new dorms, classrooms, a library and a learning center.
Manhattan assets, and the debt markets remain historically favor-
The project, located at 15 Beekman Street, is fully capitalized with
debt and joint venture equity, and demolition is well underway.
able. In 2020 we made the market, and our activity
showed the lasting value of Manhattan commercial real estate, with
We are also in a great position this year at 760 Madison Avenue, where
we are partnered with Giorgio Armani on a truly special and unique
transactions at competitive pricing on 410 10th Avenue,
boutique condo and retail project. With Landmarks approval in hand,
Tower 46 and many others.
demolition of the existing buildings that occupy the site is underway
and we are on track to begin marketing condo units in late 2022 or
Fueling this activity is a debt market unlike any we’ve seen before.
early 2023, with the historic Madison Avenue neighborhood luxury
In a business like ours where more than half of the capital of every
buyer already returning to the market and looking to smaller, boutique
asset is provided by a lender, the plentiful availability and low price
condo projects like this one in a post-COVID era. The broader residen-
of capital right now drives a big part of our success and makes us
tial condo market in New York City is already rebounding as new sale
contracts were at near-record levels in all five boroughs, indicating that
very optimistic moving forward. Right now there is a unique dynamic
people are returning to the City and taking advantage of price conces-
with real competition among lenders, spreads compressing and
sions. We have an incredible partner in Giorgio Armani whose 15-year
extended commitment to their flagship location will serve as an anchor
for Madison Avenue’s retail recovery and reinvigoration.
Perhaps our most exciting milestone of the upcoming year will take place
rates are at or near historic lows, enabling us to refinance assets and
at the top of One Vanderbilt when we open Summit One Vanderbilt.
lock in this great cost to capital for ten years in some cases. Look for
While we gave a sneak peek of the Summit at our Investor Conference
SL Green to be very active players in this market in 2021.
in December, the fully completed cultural destination will change the
way people experience the City and the environment in an immersive
experience that we believe will achieve global prominence. Summit
This has been a year like no other. We are grateful for your steadfast
One Vanderbilt will be opening to the public right after the summer and
support in a time of great uncertainty, and hope that you share our
offer visitors the opportunity to escape the constraints of lockdown and
pride in the leadership and commitment this entire team showed
be among the first to visit this multi-sensorial attraction that will rise right to
in 2020.
the top of the most desired and visited sites in Manhattan when it opens.
With all of this activity and pipeline of opportunity, we remain an
Where we sit today is proof positive that our strategy is working
undervalued company, notwithstanding our strong stock performance
and will continue to work as the company becomes leaner, more
year-to-date. At times in 2020, the disconnect was extreme, trading at
focused, better capitalized and represented by only the finest
lows of $35 per share. While our share price has recovered significantly
assets in the city. We’re going to keep pushing, performing and
from the depths of the pandemic, there remains a significant delta
to our estimate of net asset value. What we’ve done in response is
doing to the best of our abilities, and accordingly the SL Green you
unprecedented within our industry, completing nearly $2.9 billion of
know will continue to outperform our peers and competitors within
share buybacks and OP unit redemptions. Nobody in the REIT space
this market and produce the most we can for shareholders.
has accomplished anything of that magnitude. We intend to continue
this program so long as we believe our stock remains undervalued.
On behalf of myself, Andrew Mathias, our leadership team and the
In that regard, we expect to have significant opportunities for
entire SL Green family who came together in a time of uncertainty
two important reasons: there continues to be a global appetite for
this year, thank you for standing with us and sharing our belief in this
high-quality Manhattan assets, and the debt markets remain favorable
company and New York City.
at historically low rates. In 2020, our investment activity accounted for
a sizable amount of all deals transacted in Manhattan, and our accom-
plishments proved the lasting value of desirable Manhattan commercial
real estate assets, with transactions at competitive pricing on
410 Tenth Avenue, 609 Fifth Avenue, The Olivia and many others.
Fueling this activity is a robust debt market that is searching for yield on
quality assets. In a business like ours, where more than half of the capital
of every asset is provided by a lender, the abundant availability and low
Marc Holliday
price of debt capital is a stabilizing force in the Manhattan real estate
market and makes us very optimistic for the execution of our business
Chairman & Chief Executive Officer
plan in 2021. Right now, lenders are competing for mortgages by keep-
ing spreads low for 10-year fixed rate product and supporting asset
values. Look for SL Green to be a very active player in this market in 2021.
Closing
2020 was a year like no other. We are grateful for your steadfast support
in a time of great uncertainty, and hope that you share our pride in
the leadership and commitment this entire team showed in 2020.
Where we sit today is proof positive that our strategy is working and
will continue to work as the Company becomes leaner, more focused,
better capitalized and represented by only the finest assets in the
City. We’re going to keep pushing and performing to the best of our
abilities, and accordingly, the SL Green you know will continue to
outperform our peers and competitors within this market and produce
the most we can for shareholders.
On behalf of myself, Andrew Mathias, our leadership team and the
entire SL Green family who came together in a time of uncertainty,
thank you for standing with us and sharing our belief in this Company
and New York, the greatest City in the world.
Marc Holliday
Chairman & Chief Executive Officer
4
| SL GREEN ANNUAL REPORT 2020
SL GREEN ANNUAL REPORT 2020
SL GREEN ANNUAL REPORT 2020
| 5
| 5
210412_SLG_AR2020_Letter_r1.indd 4-5
210412_SLG_AR2020_Letter_r1.indd 4-5
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FPOFPO
New York City
stopped.
We didn’t.
for our future
One
Vanderbilt
Opening One Vanderbilt
in September 2020 was a
monumental achievement for
SL Green and a declaration
that New York City is ready to
reopen. Delivering Midtown’s
newest, skyline-defining tower
ahead of schedule, under
budget and approximately
70% leased, despite the
pandemic, sent a clear signal
that the future of New York City
is bright.
One Vanderbilt proves that —
regardless of the business
cycle — premium, perfectly
located properties are the
choice for the world’s leading
finance, banking, law and
real estate firms.
The 1,401-foot One Vanderbilt
is also testament to what a
public-private partnership
can achieve, which will be
on full display as New Yorkers
enjoy an improved Grand
Central Terminal and brand-
new public plaza.
09.2001
site assemblage commenced
(acquired 317 madison avenue)
11.2011
site fully assembled
(acquired 51 e 42 street)
05.2015
special permit awarded
09.2020
ribbon cutting
SL GREEN ANNUAL REPORT 2020
| 9
“ This is the most
tangible sign of the
rebirth of NYC.”
mayor bill de blasio, one vanderbilt, ribbon cutting
10
| SL GREEN ANNUAL REPORT 2020
27
stories
$2.3b
project cost
11.20
11.23
commencement
projected
completion
1.4m sq
ft
$250k
development
donation to
madison square park
for our future
One
Madison
Together with the National
Pension Service of Korea,
Hines, Kohn Pedersen Fox
and AECOM Tishman —
the same design and devel-
opment team that delivered
One Vanderbilt — we
celebrated the commence-
ment of our project at
One Madison Avenue in
November 2020.
The new 27-story, 1.4 million-
square-foot adaptive
reuse development, featuring
cutting-edge infrastructure,
a best-in-class healthy work
environment and forward-
thinking amenity program,
will dramatically transform
the Midtown South trophy
into a dynamic, inspiring
workplace for the 21st century.
On that same day, SL Green
announced the closing of a
$1.25 billion construction
facility, led by leading global
financial institutions, that
will fully fund the project on
a go-forward basis — further
confirming the belief that
New York City’s future is great.
SL GREEN ANNUAL REPORT 2020
| 13
“ One Madison will
have a dramatic and
positive impact on
its neighborhood that
will infuse a time-
less New York City
property with a
dynamic, inspiring
workplace for
the 21st century.”
douglas hocking, aia, kpf design principal
14
| SL GREEN ANNUAL REPORT 2020
01
for our future
01
185
Broadway
The topping off of 185 Broadway
in September 2020 represented
a major milestone for Lower
Manhattan and a continuation
of SL Green’s presence in the
neighborhood. Once completed,
the 34-story mixed-use building
will be the area’s first develop-
ment to be built under the
Affordable New York Housing
Program, with 30% of units
designated affordable, while
creating 600 jobs.
209
30%
residential units
affordable units
41ksq
ft
commercial /
medical office
10ksq
ft
flagship retail
Located directly across from
the Fulton Transit Center, the
260,000-square-foot building
is designed by renowned
firm FXCollaborative and will
feature a suite of amenities
that are unrivaled in down-
town Manhattan.
“ 185 Broadway enables
us to bring essential
affordable housing to the
neighborhood through
the Affordable New York
Program.”
edward v. piccinich, chief operating officer
SL GREEN ANNUAL REPORT 2020
| 17
15 years
giorgio armani’s
commitment to
madison avenue
13
exclusive residential
units
58k sq
ft
04.24
development
projected
completion
100%
committed to
pace university
424
student beds
220k sq
ft
08.23
development
projected
completion
02
760
Madison
SL Green’s partnership with The
Armani Group at 760 Madison
Avenue represents the essence
of Armani lifestyle brands —
Armani/Casa, Armani Ristorante,
and luxury residences designed
by Giorgio Armani.
The redesign by the renowned
New York architecture firm,
COOKFOX, reflects the
evolution of the Armani brand
and will revitalize one of the
world’s most recognized retail
corridors with a new flagship
Giorgio Armani retail boutique.
03
15
Beekman
Marking SL Green’s third partner-
ship with Pace University,
15 Beekman is a new, fully
committed 220,000-square-
foot residence hall featuring a
modern dining facility, state-
of-the-art library and learning
center, as well as new classrooms,
and academic and common
spaces. 15 Beekman continues
Pace’s Master Plan to revitalize
its Lower Manhattan campus
and SL Green’s continued
dedication to the University
and its students.
18
| SL GREEN ANNUAL REPORT 2020
02
03
for our community
Food1st
In April 2020, in response
to the COVID-19 pandemic,
SL Green launched a new
501(c)3 nonprofit initiative,
Food1st, with a $1 million initial
contribution. World-renowned
Chef Daniel Boulud served
as the foundation’s inaugural
partner, delivering meals
to first responders and food-
insecure New Yorkers.
Food1st was founded with a
dual mission: to address
increasing demand for food
assistance, while also helping
to revitalize New York City’s
food and beverage industry
by reactivating restaurant
kitchens and bringing restau-
rant staff safely back to work.
Over the course of its first
year, the Foundation has
raised nearly $5 million, and
its work has helped countless
people through a uniquely
challenging time.
600,000+
meals served to date
30
300+
kitchen
participants
restaurant staff
employed
165
locations served
SL GREEN ANNUAL REPORT 2020
| 21
“ The restaurant
industry has been
hit hard, but we still
have the facilities,
ability and desire
to safely provide
quality, nourishing
meals to essential
workers and those
most in need.”
chef daniel boulud
22
| SL GREEN ANNUAL REPORT 2020
for our tenants
SLG
Forward
Shortly after the pandemic
began, in April 2020, SL Green
launched SLG Forward —
an innovative set of safety,
cleanli ness and wellness pro-
grams that showed New York
that it was safe to work from
the office.
By implementing new infra-
structure and protocols for
tenants, including passive
thermal screening, touchless
fixtures and industry-leading
air filtration, in addition to
extensive building employee
trainings to ensure that best
practices were followed, all of
our buildings remained open
and safe for use by essential
tenants throughout 2020.
Then, in March 2021, SL Green
announced the launch of the
first portfolio-wide COVID
testing initiative in New York
City, identifying 21 loca-
tions — covering more than
200,000 square feet — for
use as temporary testing
centers. Working in partner-
ship with New York State
and City, we are at the fore-
front of instilling confidence
in New Yorkers to return to
the office and ensuring all of
our buildings open safely
for employees.
100%
slg buildings remained open throughout
the pandemic for essential businesses
25
375
passive thermal
imagers fitted
in lobbies
air purification
units installed
21
800+
covid testing
locations
tenants served by
slg testing sites
SL GREEN ANNUAL REPORT 2020
| 25
for our employees
Returning
Safely
SL Green was one of the
first major New York City
companies to bring 100%
of its employees back to the
office, starting in June 2020.
An industry-leading set of
incentives and amenities met
employees to ensure that
their return to the office was
as safe, seamless and com-
fortable as possible.
In October, The New York
Times profiled our approach,
high lighting new benefits
like individually prepared
lunches, subsidized parking
and in-home child care for
our employees. One of our
most popular and creative
offerings was the introduction
of educational pods that
allowed employees to return to
the office while their children
benefited from world-class
tutoring just one floor away.
26
| SL GREEN ANNUAL REPORT 2020
1st
nyc company to return to
100% work from office
06.15.20
100%
reopened office
to employees
subsidized onsite
tutoring program
“ SL Green is one of the
most prominent
examples of what some
companies will do
to bring people back.”
the new york times, october 30, 2020
98.6ºF
97.8ºF
98.6ºF
97.8ºF
for our shareholders
2020
Highlights(1)
In an unprecedented year,
SL Green successfully imple-
mented an aggressive strategy
to protect its balance sheet,
while continuing its value accre-
tive share buyback program.
The Company responded to
the uncertainty of the pandemic
with “The $1 Billion Plan”
in April 2020, designed to
increase the Company’s cash
on hand to over $1 billion and
provide the con fidence to
continue pursuing strategic
goals. In furtherance of
this plan, SL Green led the
NYC transaction market
in 2020, with asset sales total-
ing $2.0 billion, including
dispositions of the The Olivia,
609 Fifth Avenue and
410 Tenth Avenue — the
largest commercial property
sale in the United States
since March 2020.
Utilizing the liquidity from
these transactions, the
Company was able to repur-
chase $559.5 million of
stock and units in 2020 —
bringing the buyback pro-
gram to nearly $2.8 billion
of repurchases since 2017.
Shareholders were also
rewarded with an ordinary
dividend that was increased
by 2.8% and a special
dividend of $1.70 per share.
$2.0b(2)
$559.5m
dispositions
shares / units
repurchased in 2020
$455.2m
2.8%
funds available
for distribution
increase in
ordinary dividend
$1.70
1.25m sq
ft
per share
special dividend
manhattan office
leasing
(1) All data as of 12/31/20.
(2) Includes consolidated cash, marketable securities and undrawn
capacity on the Company’s unsecured revolving credit facility; excludes
SLG share of unconsolidated JV cash and cash equivalents.
SL GREEN ANNUAL REPORT 2020
| 29
for our city
By New
Yorkers
For New
Yorkers
SL Green’s unwavering faith in
the future of New York helped
deliver thousands of jobs
and vital economic activity in
2020 — when the city needed
it most.
We safely pushed ahead on
our construction projects, kept
all of our buildings open and
accessible, and led the way in
having our entire team work-
ing from the office beginning
in June.
The City’s success is our success
and we’re doing everything
possible to support our tenants
and their employees as
New York City springs back
to life.
30
| SL GREEN ANNUAL REPORT 2020
100%
100%
committed to
reopening
new york city
invested in
new york city
100%
100%
work from office
union labor at ova
“ We remain focused on
boosting the economy,
creating thousands of
construction jobs and
creating best-in-class
offices that meet the
demands of today’s top
companies and talent.”
andrew mathias, president
4
49
50
33 43
8
34
35
32
30
14
3
6
53
17
2
44
36
F
I
F
T
H
A
V
E
N
U
E
38
M
A
D
I
S
O
N
A
V
E
N
U
E
37
14TH STREET
51
12
23RD STREET
34TH STREET
10
42ND STREET
20
21
22
24
53
9
48
5
11
7
13
15
50TH STREET
25
S
E
C
O
N
D A
V
E
N
U
E
52
FIR
S
T A
V
E
N
U
E
57 TH STREET
59 TH STREET
L
E
X
I
N
G
T
O
N
A
V
E
N
U
E
T
H
I
R
D
A
V
E
N
U
E
P
A
R
K
A
V
E
N
U
E
45
65TH STREET
42
40
47
31
53
53
18
19
1
27
S
I
X
T
H
A
V
E
N
U
E
26
41
39
14TH STREET
23RD STREET
28
34TH STREET
54
29
42ND STREET
23
S
E
V
E
N
T
H
A
V
E
N
U
E
E
I
G
H
T
H
A
V
E
N
U
E
50TH STREET
N
I
N
T
H
A
V
E
N
U
E
T
E
N
T
H
A
V
E
N
U
E
57 TH STREET
46
16
CENTRAL PARK SOUTH
B
R
O
A
D
W
A
Y
C
E
N
T
R
A
L
P
A
R
K
W
E
S
T
66TH STREET
Ownership
Interest (%)
Submarket
Ownership
Usable Occupancy
(%)
Square Feet
SL Green Portfolio
Map Properties
Key (As of December 31, 2020)
OFFICE PROPERTIES
1
2 Herald Square
2
10 East 53rd Street
3
55 West 46th Street — Tower 46
4
100 Church Street
5
100 Park Avenue
6
11 Madison Avenue
7
110 East 42nd Street
8
110 Greene Street
9
125 Park Avenue
10 220 East 42nd Street
11 280 Park Avenue
12 304 Park Avenue South
13 420 Lexington Ave (Graybar)
14 461 Fifth Avenue
15 485 Lexington Avenue
16 555 West 57th Street
17 590 Fifth Avenue
18 635 Sixth Avenue
19 641 Sixth Avenue
20 711 Third Avenue
21 750 Third Avenue
22 800 Third Avenue
23 810 Seventh Avenue
24 885 Third Avenue
25 919 Third Avenue
26 1185 Avenue of the Americas
27 1350 Avenue of the Americas
28 1515 Broadway
29 Worldwide Plaza
SUBTOTAL
RETAIL PROPERTIES
30 11 West 34th Street
31 21 East 66th Street
32 85 Fifth Avenue
33 115 Spring Street
34 121 Greene Street
35 133 Greene Street
36 650 Fifth Avenue
37 712 Madison Avenue
38 717 Fifth Avenue
39 719 Seventh Avenue
40 760 Madison Avenue
41 1552–1560 Broadway
SUBTOTAL
DEVELOPMENT / REDEVELOPMENT
42 19–21 East 65th Street
43 106 Spring Street
44 609 Fifth Avenue
45 625 Madison Avenue
46 707 Eleventh Avenue
47 762 Madison Avenue
SUBTOTAL
CONSTRUCTION IN PROGRESS
48 One Vanderbilt
49 185 Broadway
50 15 Beekman
51 One Madison Avenue
SUBTOTAL
RESIDENTIAL PROPERTIES
52 400 East 57th Street
*
1080 Amsterdam
53 Stonehenge Portfolio
54 605 West 42nd Street— Sky
SUBTOTAL
NEW YORK CITY GRAND TOTAL
*
SUBURBAN PORTFOLIO
Landmark Square
SUBURBAN GRAND TOTAL
TOTAL PORTFOLIO
51.0
55.0
25.0
100.0
50.0
60.0
100.0
100.0
100.0
100.0
50.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0(2)
100.0
60.5
100.0
100.0
51.0
100.0
100.0
57.0
24.35
30.0
32.3
36.27
51.0
50.0
100.0
50.0
100.0
10.9
75.0
100.0
50.0
100.0
100.0
100.0
100.0
100.0
100.0
71.0
100.0
20.0
50.5
Herald Square
Plaza District
Midtown
Downtown
Grand Central South
Park Avenue South
Grand Central
Soho
Grand Central
Grand Central
Park Avenue
Midtown South
Grand Central North
Midtown
Grand Central North
Midtown West
Midtown
Midtown South
Midtown South
Grand Central North
Grand Central North
Grand Central North
Times Square
Midtown / Plaza District
Grand Central North
Rockefeller Center
Rockefeller Center
Times Square
Westside
Leasehold Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest
Leasehold Interest(1)
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest(2)
Fee Interest
Fee Interest
Fee Interest
Fee / Leasehold Interest
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
Fee Interest
369,000
354,300
347,000
1,047,500
834,000
2,314,000
215,400
223,600
604,245
1,135,000
1,219,158
215,000
1,188,000
200,000
921,000
941,000
103,300
104,000
163,000
524,000
780,000
526,000
692,000
625,300
1,454,000
1,062,000
562,000
1,750,000
2,048,725
22,522,528
Herald Square / Penn Station Fee Interest
Fee Interest
Plaza District
Fee Interest
Midtown South
Fee Interest
Soho
Fee Interest
Soho
Fee Interest
Soho
Leasehold Interest
Plaza District
Fee Interest
Plaza District
Fee Interest
Midtown / Plaza District
Fee Interest
Times Square
Fee Interest
Plaza District
Fee Interest
Times Square
Plaza District
Soho
Rockefeller Center
Plaza District
Midtown West
Plaza District
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
Grand Central
Lower Manhattan
Lower Manhattan
Park Avenue South
Fee Interest
Fee Interest
Leasehold Interest
Fee Interest
41.0
92.5
Various
20.0
Upper East Side
Upper West Side
Westside
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
100.0
Stamford, Connecticut
Fee Interest
17,150
13,069
12,946
5,218
7,131
6,425
69,214
6,600
119,550
10,040
21,124
57,718
346,185
23,610
5,928
138,563
563,000
159,720
6,109
896,930
1,657,198
198,488
221,884
1,048,700
3,126,270
290,482
82,250
445,934
927,358
1,746,024
28,637,937
862,800
862,800
29,500,737
95.8
93.5
91.9
99.3
82.5
95.7
88.9
89.3
99.6
94.1
92.0
91.2
90.5
86.2
89.5
99.9
68.5
100.0
100.0
89.1
66.9
94.7
89.3
88.5
100.0
79.8
81.2
99.9
96.6
100.0
100.0
100.0
100.0
100.0
48.6
100.0
100.0
100.0
—
100.0
88.3
3.6
—
100.0
26.7
23.3
32.8
—
—
—
—
66.2
35.4
65.7
85.8
83.3
83.3
(1) The Company has an option to acquire the fee interest for a fixed price on a specific date.
(2) The Company owns 50% of the fee interest.
* Properties not shown on map.
34
| SL GREEN ANNUAL REPORT 2020
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green
Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were
formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its
affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, engaged in the
acquisition, development, ownership, management and operation of commercial and residential real estate properties,
principally office properties, located in the New York metropolitan area. Unless the context requires otherwise, all references to
"we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating
Partnership.
The COVID-19 pandemic has caused, and continues to cause, severe disruptions with wide ranging impacts to the global
economy and everyday life. We expect that our business, results of operations, liquidity, cash flows, prospects, and our ability
to achieve forward-looking targets and expectations could be materially and adversely affected for at least the duration of the
COVID-19 pandemic and likely longer. This could also cause significant volatility in the trading prices of our securities. The
extent of the impact of the COVID-19 pandemic will depend on future developments, including the duration, severity and
spread of the pandemic, health and safety actions taken to contain its spread and how quickly and to what extent normal
economic and operating conditions can resume. Additionally, the COVID-19 pandemic could increase the magnitude of many
of the other risks described in this Annual Report on Form 10-K and our other SEC filings and may have other adverse effects
on our operations that we are not currently able to predict.
The scale and magnitude of adverse impacts could depend on, among other factors:
•
•
•
•
•
•
•
•
•
•
the financial condition of our tenants and their ability or willingness to pay rent in full on a timely basis;
the impact on rents and demand for office and retail space;
the extent to which work-from-home policies continue subsequent to the easing of pandemic-related restrictions;
the impact of new regulations or norms on physical space needs and expectations;
the financial condition of the borrowers and sponsors of our debt and preferred equity investments and their ability or
willingness to make interest and principal payments;
the effectiveness of governmental measures aimed at slowing and containing the spread;
the effect of changes in laws and regulation;
the extent and terms associated with governmental relief programs;
the ability of debt and equity markets to function and provide liquidity; and
the ability to mitigate delays or cost increases associated with building materials or construction services necessary for
development, redevelopment and tenant improvements
The following discussion related to our consolidated financial statements should be read in conjunction with the financial
statements appearing in Item 8 of this Annual Report on Form 10-K. A discussion of our results of operations for the year
ended December 31, 2019 compared to the year ended year ended December 31, 2018 is included in Part II, Item 7
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K
for the year ended December 31, 2019, filed with the SEC on February 28, 2020, and is incorporated by reference into this
Annual Report on Form 10-K.
Leasing and Operating
At December 31, 2020, our same-store Manhattan office property occupancy inclusive of leases signed but not
commenced, was 93.4% compared to 96.2% at December 31, 2019. We signed office leases in Manhattan encompassing
approximately 1.2 million square feet, of which approximately 0.9 million square feet represented office leases that replaced
previously occupied space. Our mark-to-market on the signed Manhattan office leases that replaced previously occupied space
was (3.6)% for 2020.
According to Cushman & Wakefield, leasing activity in Manhattan in 2020 totaled approximately 12.8 million square
feet. Of the total 2020 leasing activity in Manhattan, the Midtown submarket accounted for approximately 8.9 million square
feet, or approximately 69.5%. Manhattan's overall office vacancy went from 11.1% at December 31, 2019 to 15.2% at
December 31, 2020. Overall average asking rents in Manhattan decreased in 2020 by 0.3% from $73.41 per square foot at
1
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December 31, 2019 to $73.16 per square foot at December 31, 2020, while Manhattan Class A asking rents increased to $80.18
per square foot , up 0.5% from $79.82 at December 31, 2019.
•
Took possession of 590 Fifth Avenue at a gross asset valuation of $107.2 million.This property previously served as
collateral for a debt and preferred equity investment and was acquired through a negotiated transaction with the
Acquisition and Disposition Activity
Overall Manhattan sales volume decreased by 61.0% in 2020 to $13.0 billion as compared to $29.4 billion in 2019.
However, we continued to take advantage of significant interest by both international and domestic institutions and individuals
seeking ownership interests in Manhattan properties to sell assets, disposing of a significant volume of properties that were
considered non-core or had a more limited growth trajectory, raising efficiently priced capital that was used primarily for share
repurchases and debt reduction. During the year, we closed on the sales of all or a portion of our interests in 30 East 40th Street,
1055 Washington Boulevard, Williamsburg Terrace, 410 Tenth Avenue, 333 East 22nd Street, 400 East 58th Street, the retail
condominium at 609 Fifth Avenue, and 315 West 33rd Street - "The Olivia" for total gross valuations of $1.7 billion.
Debt and Preferred Equity
In 2019 and 2020, in our debt and preferred equity portfolio we continued to focus on the origination of financings for
owners, acquirers or developers of properties in New York City, while selectively selling certain investments, the proceeds of
which were utilized to repurchase shares of common stock or for debt repayment. This investment strategy provides us with the
opportunity to fill a need for additional debt financing, while achieving attractive risk adjusted returns to us on the investments
and receiving a significant amount of additional information on the New York City real estate market. The typical investments
made by us during 2019 and 2020 were to reputable owners or acquirers which have sizable equity subordinate to our last dollar
of exposure. During 2020, our debt and preferred equity activities included purchases and originations, inclusive of advances
under future funding obligations, discount and fee amortization, and paid-in-kind interest, net of premium amortization, of $0.6
billion, and sales, redemption and participations of $1.0 billion.
For descriptions of significant activities in 2020, refer to "Part I, Item 1. Business - Highlights from 2020."
Highlights from 2020
Our significant achievements from 2020 included:
Corporate
•
•
Leasing
•
•
Declared a special dividend paid primarily in stock and authorized a reverse stock split to mitigate the dilutive
impact of the special dividend with a ratio of 1.02918-for-1. These transactions were completed in January 2021. All
share-related references and measurements in this report including the number of shares outstanding, share prices,
number of shares repurchased, earnings per share, dividends per share, and share-based compensation awards, have
been retroactively adjusted to reflect the reverse stock split for all periods presented in this Annual Report.
Repurchased 8.5 million shares of our common stock under our share repurchase program at an average price of
$58.90 per share and increased the size of our share repurchase program by $500 million to $3.5 billion. From
program inception through December 31, 2020, we have repurchased a cumulative total of 31.5 million shares of our
common stock under the program at an average price of $88.39 per share.
Signed 125 Manhattan office leases covering approximately 1.2 million square feet. The mark-to-market on signed
Manhattan office leases was 3.6% lower in 2020 than the previously fully escalated rents on the same spaces.
Reached 73% leased at One Vanderbilt Avenue as of January 2021 after signing new leases with Walker & Dunlop,
LLC; Heidrick & Struggles, International; 1Life Healthcase, Inc. d/b/a One Medical; Hodges Ward Elliot; InTandem
Capital Partners; Sagewind Capital LLC; and a financial services firm; as well as a lease expansion with Oak Hill
Advisors.
•
Signed a lease renewal with Travelers Indeminity Company for 133,479 square feet at 485 Lexington Avenue.
Acquisitions
•
•
Closed on the acquisition of 707 Eleventh Avenue for a gross purchase price of $90.0 million.
Entered into a 99-year ground lease of 15 Beekman and completed the capitalization of a 100% pre-committed
development for Pace University by entering into a partnership with a real estate fund managed by Meritz
Alternative Investment Management, which holds an 80% interest in the joint venture, and closing on a $125.0
million construction facility. The Company retained a 20% interest in the joint venture and oversight of the
development.
sponsor of the investment
Dispositions
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Together with our partners, closed on the sale of 410 Tenth Avenue for gross consideration of $952.5 million.
Closed on the sale of two retail condominiums in Williamsburg, Brooklyn, for a gross sales price of $32.0 million.
Closed on the sale of 1055 Washington Boulevard in Stamford, Connecticut, for a gross sales price of $23.8 million.
Closed on the sale of 1010 Washington Boulevard in Stamford, Connecticut, for a gross sales price of $23.1 million.
Together with our partner, closed on the sale of 400 East 58th Street for a gross sales price of $62.0 million.
Closed on the sale of a 49.5% interest in One Madison Avenue to the National Pension Service of Korea and Hines
Interest LP. These partners have committed aggregate equity to the project totaling no less than $492.2 million. The
Company and Hines Interest LP will co-develop the $2.3 billion project, which will span 1.4 million rentable square
feet upon completion.
Closed on the sale of the retail condominium at 609 Fifth Avenue for a gross sales price of $168.0 million.
Closed on the sale of 315 West 33rd Street, known as The Olivia, and an adjacent undeveloped parcel of land, for a
sale price of $446.5 million. The transaction included a $100 million preferred equity investment by the Company.
Debt and Preferred Equity Investments
Originated and retained, or acquired, $0.6 billion in debt and preferred equity investments, inclusive of advances
under future funding obligations, discount and fee amortization, and paid-in-kind interest, net of premium
amortization, and recorded $1.0 billion of proceeds from sales, repayments and participations.
Finance
Together with our joint venture partners, closed on a new $1.25 billion construction facility for One Madison
Avenue. The facility has a term of up to 6 years and bears interest at a floating rate of 3.35% over LIBOR, with the
ability to reduce the spread to as low as 2.50% upon achieving certain pre-leasing and completion milestones.
Together with our joint venture partner, closed on the early refinancing of 100 Park Avenue. The new $360.0
million mortgage has a term of up to 5 years and bears interest at a floating rate of 2.25% over LIBOR.
Together with our partners, closed on a new $600.0 million construction facility for 410 Tenth Avenue, replacing the
previous $465.0 million construction facility that was put in place in 2019. The Company and its partners
subsequently closed on the sale of this property for gross consideration of $952.5 million.
Closed on a $510.0 million mortgage financing of 220 East 42nd Street, also known as the New Building. The new
mortgage has a 3-year term, with two one-year extension options and bears interest at a floating rate of 2.75% per
annum over LIBOR.
LIBOR.
Together with our partner, closed on the refinancing of 10 East 53rd Street. The new $220.0 million mortgage
replaces the previous $170.0 million mortgage, has a 5-year term, and bears interest at a floating rate of 1.35% over
As of December 31, 2020, we owned the following interests in properties in the New York metropolitan area, primarily in
midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
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2
3
December 31, 2019 to $73.16 per square foot at December 31, 2020, while Manhattan Class A asking rents increased to $80.18
per square foot , up 0.5% from $79.82 at December 31, 2019.
Acquisition and Disposition Activity
Overall Manhattan sales volume decreased by 61.0% in 2020 to $13.0 billion as compared to $29.4 billion in 2019.
However, we continued to take advantage of significant interest by both international and domestic institutions and individuals
seeking ownership interests in Manhattan properties to sell assets, disposing of a significant volume of properties that were
considered non-core or had a more limited growth trajectory, raising efficiently priced capital that was used primarily for share
repurchases and debt reduction. During the year, we closed on the sales of all or a portion of our interests in 30 East 40th Street,
1055 Washington Boulevard, Williamsburg Terrace, 410 Tenth Avenue, 333 East 22nd Street, 400 East 58th Street, the retail
condominium at 609 Fifth Avenue, and 315 West 33rd Street - "The Olivia" for total gross valuations of $1.7 billion.
Debt and Preferred Equity
In 2019 and 2020, in our debt and preferred equity portfolio we continued to focus on the origination of financings for
owners, acquirers or developers of properties in New York City, while selectively selling certain investments, the proceeds of
which were utilized to repurchase shares of common stock or for debt repayment. This investment strategy provides us with the
opportunity to fill a need for additional debt financing, while achieving attractive risk adjusted returns to us on the investments
and receiving a significant amount of additional information on the New York City real estate market. The typical investments
made by us during 2019 and 2020 were to reputable owners or acquirers which have sizable equity subordinate to our last dollar
of exposure. During 2020, our debt and preferred equity activities included purchases and originations, inclusive of advances
under future funding obligations, discount and fee amortization, and paid-in-kind interest, net of premium amortization, of $0.6
billion, and sales, redemption and participations of $1.0 billion.
For descriptions of significant activities in 2020, refer to "Part I, Item 1. Business - Highlights from 2020."
Highlights from 2020
Our significant achievements from 2020 included:
Corporate
•
Declared a special dividend paid primarily in stock and authorized a reverse stock split to mitigate the dilutive
impact of the special dividend with a ratio of 1.02918-for-1. These transactions were completed in January 2021. All
share-related references and measurements in this report including the number of shares outstanding, share prices,
number of shares repurchased, earnings per share, dividends per share, and share-based compensation awards, have
been retroactively adjusted to reflect the reverse stock split for all periods presented in this Annual Report.
•
Repurchased 8.5 million shares of our common stock under our share repurchase program at an average price of
$58.90 per share and increased the size of our share repurchase program by $500 million to $3.5 billion. From
program inception through December 31, 2020, we have repurchased a cumulative total of 31.5 million shares of our
common stock under the program at an average price of $88.39 per share.
Leasing
•
•
•
•
•
Advisors.
Acquisitions
Signed 125 Manhattan office leases covering approximately 1.2 million square feet. The mark-to-market on signed
Manhattan office leases was 3.6% lower in 2020 than the previously fully escalated rents on the same spaces.
Reached 73% leased at One Vanderbilt Avenue as of January 2021 after signing new leases with Walker & Dunlop,
LLC; Heidrick & Struggles, International; 1Life Healthcase, Inc. d/b/a One Medical; Hodges Ward Elliot; InTandem
Capital Partners; Sagewind Capital LLC; and a financial services firm; as well as a lease expansion with Oak Hill
Signed a lease renewal with Travelers Indeminity Company for 133,479 square feet at 485 Lexington Avenue.
Closed on the acquisition of 707 Eleventh Avenue for a gross purchase price of $90.0 million.
Entered into a 99-year ground lease of 15 Beekman and completed the capitalization of a 100% pre-committed
development for Pace University by entering into a partnership with a real estate fund managed by Meritz
Alternative Investment Management, which holds an 80% interest in the joint venture, and closing on a $125.0
million construction facility. The Company retained a 20% interest in the joint venture and oversight of the
development.
•
Took possession of 590 Fifth Avenue at a gross asset valuation of $107.2 million.This property previously served as
collateral for a debt and preferred equity investment and was acquired through a negotiated transaction with the
sponsor of the investment
Dispositions
•
•
•
•
•
•
•
•
Together with our partners, closed on the sale of 410 Tenth Avenue for gross consideration of $952.5 million.
Closed on the sale of two retail condominiums in Williamsburg, Brooklyn, for a gross sales price of $32.0 million.
Closed on the sale of 1055 Washington Boulevard in Stamford, Connecticut, for a gross sales price of $23.8 million.
Closed on the sale of 1010 Washington Boulevard in Stamford, Connecticut, for a gross sales price of $23.1 million.
Together with our partner, closed on the sale of 400 East 58th Street for a gross sales price of $62.0 million.
Closed on the sale of a 49.5% interest in One Madison Avenue to the National Pension Service of Korea and Hines
Interest LP. These partners have committed aggregate equity to the project totaling no less than $492.2 million. The
Company and Hines Interest LP will co-develop the $2.3 billion project, which will span 1.4 million rentable square
feet upon completion.
Closed on the sale of the retail condominium at 609 Fifth Avenue for a gross sales price of $168.0 million.
Closed on the sale of 315 West 33rd Street, known as The Olivia, and an adjacent undeveloped parcel of land, for a
sale price of $446.5 million. The transaction included a $100 million preferred equity investment by the Company.
Debt and Preferred Equity Investments
•
Originated and retained, or acquired, $0.6 billion in debt and preferred equity investments, inclusive of advances
under future funding obligations, discount and fee amortization, and paid-in-kind interest, net of premium
amortization, and recorded $1.0 billion of proceeds from sales, repayments and participations.
Finance
•
•
•
•
•
Together with our joint venture partners, closed on a new $1.25 billion construction facility for One Madison
Avenue. The facility has a term of up to 6 years and bears interest at a floating rate of 3.35% over LIBOR, with the
ability to reduce the spread to as low as 2.50% upon achieving certain pre-leasing and completion milestones.
Together with our joint venture partner, closed on the early refinancing of 100 Park Avenue. The new $360.0
million mortgage has a term of up to 5 years and bears interest at a floating rate of 2.25% over LIBOR.
Together with our partners, closed on a new $600.0 million construction facility for 410 Tenth Avenue, replacing the
previous $465.0 million construction facility that was put in place in 2019. The Company and its partners
subsequently closed on the sale of this property for gross consideration of $952.5 million.
Closed on a $510.0 million mortgage financing of 220 East 42nd Street, also known as the New Building. The new
mortgage has a 3-year term, with two one-year extension options and bears interest at a floating rate of 2.75% per
annum over LIBOR.
Together with our partner, closed on the refinancing of 10 East 53rd Street. The new $220.0 million mortgage
replaces the previous $170.0 million mortgage, has a 5-year term, and bears interest at a floating rate of 1.35% over
LIBOR.
As of December 31, 2020, we owned the following interests in properties in the New York metropolitan area, primarily in
midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
2
3
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Location
Property Type
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Weighted
Average
Occupancy(1)
Consolidated
Unconsolidated
Total
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
18
10,681,045
11
11,841,483
44,189
1,095,418
9
3
301,996
2,927,782
11,820,652
23
15,071,261
862,800
—
—
29
13
11
53
7
22,522,528
346,185
4,023,200
26,891,913
862,800
12,683,452
23
15,071,261
60
27,754,713
82,250
8
1,663,774
9
1,746,024
12,765,702
31
16,735,035
69
29,500,737
4
8
30
7
37
1
38
92.4 %
94.2 %
N/A
92.5 %
83.3 %
92.1 %
75.7 %
91.2 %
(1)
The weighted average occupancy for commercial properties represents the total occupied square feet divided by total square footage at acquisition. The
weighted average occupancy for residential properties represents the total occupied units divided by total available units.
As of December 31, 2020, we also managed two office buildings owned by third parties encompassing approximately 2.1
million square feet, and held debt and preferred equity investments with a book value of $1.1 billion, excluding $0.1 billion of
debt and preferred equity investments and other financing receivables that are included in balance sheet line items other than the
Debt and Preferred Equity Investments line item.
Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is based on our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on
historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the
following critical accounting policies affect our more significant judgments and estimates used in the preparation of our
consolidated financial statements.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the
development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated
useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an
acquired entity at their respective fair values on the acquisition date.
The Company classifies those leases under which the Company is the lessee at lease commencement as finance or
operating leases. Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the
lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the
remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the
asset. Leases that do not qualify as finance leases are deemed to be operating leases. On the consolidated statements of
operations, operating leases are expensed through operating lease rent while financing leases are expensed through amortization
and interest expense.
We incur a variety of costs in the development and leasing of our properties. After the determination is made to capitalize
a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is
substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under
development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs
essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and
related costs and other costs incurred during the period of development. We consider a construction project as substantially
completed and held available for occupancy upon the completion of tenant improvements, but no later than one year after major
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4
5
construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for
occupancy, and capitalize only those costs associated with the portions under construction.
On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be
impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's
estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the
property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property
over the fair value of the property as calculated in accordance with ASC 820.
We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate
assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no
longer recorded. See Note 4, "Properties Held for Sale and Dispositions."
Investments in Unconsolidated Joint Ventures
We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where
we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary.
We consolidate those joint ventures that we control or which are variable interest entities (each, a "VIE") and where we are
considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as
well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us
from consolidating these VIE entities. These investments are recorded initially at cost, as investments in unconsolidated joint
ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Equity in net
income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture
and includes adjustments related to basis differences in accounting for the investment. When a capital event (as defined in each
joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our
increased economic interest. We recognize incentive income from unconsolidated real estate joint ventures as income to the
extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures
in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future
obligations of the joint venture or may otherwise be committed to provide future additional financial support. We generally
finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space,
which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value
of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments
for impairment based on each joint ventures' actual and projected cash flows. We do not believe that the values of any of our
equity investments were impaired at December 31, 2020.
We may originate loans for real estate acquisition, development and construction ("ADC loans") where we expect to
receive some of the residual profit from such projects. When the risk and rewards of these arrangements are essentially the same
as an investor or joint venture partner, we account for these arrangements as real estate investments under the equity method of
accounting for investments. Otherwise, we account for these arrangements consistent with the accounting for our debt and
preferred equity investments.
Lease Classification
Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not
classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if
the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the
economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds
substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any
value to the Company at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct
financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and
unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
Revenue Recognition
Rental revenue for operating leases is recognized on a straight-line basis over the term of the lease. Rental revenue
recognition commences when the leased space is available for its intended use by the lessee.
To determine whether the leased space is available for its intended use by the lessee, management evaluates whether we
are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the
owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which
is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not
the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space.
Location
Property Type
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Weighted
Average
Occupancy(1)
Consolidated
Unconsolidated
Total
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Suburban
Office
Residential:
Manhattan
Residential
Total portfolio
4
8
30
7
37
1
38
18
10,681,045
11
11,841,483
44,189
1,095,418
862,800
9
3
—
301,996
2,927,782
—
11,820,652
23
15,071,261
29
13
11
53
7
22,522,528
346,185
4,023,200
26,891,913
862,800
82,250
8
1,663,774
9
1,746,024
12,765,702
31
16,735,035
69
29,500,737
92.4 %
94.2 %
N/A
92.5 %
83.3 %
92.1 %
75.7 %
91.2 %
(1)
The weighted average occupancy for commercial properties represents the total occupied square feet divided by total square footage at acquisition. The
weighted average occupancy for residential properties represents the total occupied units divided by total available units.
As of December 31, 2020, we also managed two office buildings owned by third parties encompassing approximately 2.1
million square feet, and held debt and preferred equity investments with a book value of $1.1 billion, excluding $0.1 billion of
debt and preferred equity investments and other financing receivables that are included in balance sheet line items other than the
Debt and Preferred Equity Investments line item.
Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is based on our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on
historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the
following critical accounting policies affect our more significant judgments and estimates used in the preparation of our
consolidated financial statements.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the
development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated
useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an
acquired entity at their respective fair values on the acquisition date.
The Company classifies those leases under which the Company is the lessee at lease commencement as finance or
operating leases. Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the
lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the
remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the
asset. Leases that do not qualify as finance leases are deemed to be operating leases. On the consolidated statements of
operations, operating leases are expensed through operating lease rent while financing leases are expensed through amortization
and interest expense.
We incur a variety of costs in the development and leasing of our properties. After the determination is made to capitalize
a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is
substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under
development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs
essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and
related costs and other costs incurred during the period of development. We consider a construction project as substantially
completed and held available for occupancy upon the completion of tenant improvements, but no later than one year after major
Total commercial properties
12,683,452
23
15,071,261
60
27,754,713
Investments in Unconsolidated Joint Ventures
construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for
occupancy, and capitalize only those costs associated with the portions under construction.
On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be
impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's
estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the
property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property
over the fair value of the property as calculated in accordance with ASC 820.
We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate
assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no
longer recorded. See Note 4, "Properties Held for Sale and Dispositions."
We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where
we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary.
We consolidate those joint ventures that we control or which are variable interest entities (each, a "VIE") and where we are
considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as
well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us
from consolidating these VIE entities. These investments are recorded initially at cost, as investments in unconsolidated joint
ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Equity in net
income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture
and includes adjustments related to basis differences in accounting for the investment. When a capital event (as defined in each
joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our
increased economic interest. We recognize incentive income from unconsolidated real estate joint ventures as income to the
extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures
in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future
obligations of the joint venture or may otherwise be committed to provide future additional financial support. We generally
finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space,
which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value
of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments
for impairment based on each joint ventures' actual and projected cash flows. We do not believe that the values of any of our
equity investments were impaired at December 31, 2020.
We may originate loans for real estate acquisition, development and construction ("ADC loans") where we expect to
receive some of the residual profit from such projects. When the risk and rewards of these arrangements are essentially the same
as an investor or joint venture partner, we account for these arrangements as real estate investments under the equity method of
accounting for investments. Otherwise, we account for these arrangements consistent with the accounting for our debt and
preferred equity investments.
Lease Classification
Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not
classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if
the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the
economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds
substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any
value to the Company at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct
financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and
unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
Revenue Recognition
Rental revenue for operating leases is recognized on a straight-line basis over the term of the lease. Rental revenue
recognition commences when the leased space is available for its intended use by the lessee.
To determine whether the leased space is available for its intended use by the lessee, management evaluates whether we
are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the
owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which
is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not
the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space.
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When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts
funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed
by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements
for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in
deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis
over the term of the lease.
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments
become 90 days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest
income recognition is resumed on any non-accrual debt or preferred equity investment that is when such non-accrual debt or
preferred equity investment becomes contractually current and performance is demonstrated to be resumed. Interest is recorded
as income on impaired loans only to the extent cash is received. We consider an investment to be past due when amounts
contractually due have not been paid.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred
We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the
rents receivable on the consolidated balance sheets.
In addition to base rent, our tenants also generally will pay variable rent which represents their pro rata share of increases
in real estate taxes and certain operating expenses for the building over a base year. In some leases, in lieu of paying additional
rent based upon increases in certain building operating expenses, the tenant will pay additional rent based upon increases in the
wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over
the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base
rent to cover escalations. Electricity is most often supplied by the landlord either on a sub-metered basis, or rent inclusion basis
(i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or
increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and
freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the
tenant paying additional rent only for services which exceed base building services or for services which are provided outside
normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the
current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the
actual expenses for the current year.
Rental revenue is recognized if collectability is probable. If collectability of substantially all of the lease payments is
assessed as not probable, any difference between the rental revenue recognized to date and the lease payments that have been
collected is recognized as a current-period adjustment to rental revenue. A subsequent change in the assessment of collectability
to probable may result in a current-period adjustment to rental revenue for any difference between the rental revenue that would
have been recognized if collectability had always been assessed as probable and the rental revenue recognized to date.
We recognize lease concessions related to COVID-19, such as rent deferrals and abatements, in accordance with the
Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. When
total cash flows resulting from the modified lease are not substantially similar to the cash flows in the original lease, we account
for the concession agreement as a new lease.
The Company provides its tenants with certain customary services for lease contracts such as common area maintenance
and general security. We have elected to combine the non-lease components with the lease components of our operating lease
agreements and account for them as a single lease component in accordance with ASC 842.
We record a gain or loss on sale of real estate assets when we no longer hold a controlling financial interest in the entity
holding the real estate, a contract exists with a third party and that third party has control of the assets acquired.
Investment income on debt and preferred equity investments is accrued based on the contractual terms of the instruments
and when, in the opinion of management, it is deemed collectible. Some debt and preferred equity investments provide for
accrual of interest at specified rates, which differ from current payment terms. Interest is recognized on such loans at the accrual
rate subject to management's determination that accrued interest is collectible. If management cannot make this determination,
interest income above the current pay rate is recognized only upon actual receipt.
Deferred origination fees, original issue discounts and loan origination costs, if any, are recognized as an adjustment to
interest income over the terms of the related investments using the effective interest method. Fees received in connection with
loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment
to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield
adjustment on the effective interest method based on expected cash flows through the expected maturity date of the related
investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to
recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the
investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral,
we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual
cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, the collection of which is expected, are
also recognized over the term of the loan as an adjustment to yield.
criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of
the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or
premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Debt and Preferred Equity Investments
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC
326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying
value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss
and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts
are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or
acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical
loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data and
external data which may include, among others, governmental economic projections for the New York City Metropolitan area,
public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset class and
adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we may also
use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be collected
for each outcome.
The evaluation of the possible credit deterioration associated with the performance and/or value of the underlying
collateral property as well as the financial and operating capability of the borrower/sponsor requires significant judgment,
which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through
“3,” from lower risk to higher risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 -
Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. Loans with risk ratings of 2 or 3
are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our
expectations of current conditions, historical loss information and supportable forecasts described above or whether risk
characteristics specific to the loan warrant the use of a probability-weighted model.
Financing investments that are classified as held for sale are carried at the expected amount to be collected or fair market
value using available market information obtained through consultation with dealers or other originators of such investments as
well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management
may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its
expected amount to be collected.
Other financing receivables that are included in balance sheet line items other than the Debt and Preferred Equity
Investments line are also measured at the net amount expected to the be collected.
Accrued interest receivable amounts related to these debt and preferred equity investment and other financing receivables
are recorded at the net amount expected to be collected within Other assets in the consolidated balance sheets. Write offs of
accrued interest receivables are recognized as an expense for loan loss and other investment reserves.
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6
7
When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts
funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed
by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements
for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in
deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis
over the term of the lease.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred
rents receivable on the consolidated balance sheets.
In addition to base rent, our tenants also generally will pay variable rent which represents their pro rata share of increases
in real estate taxes and certain operating expenses for the building over a base year. In some leases, in lieu of paying additional
rent based upon increases in certain building operating expenses, the tenant will pay additional rent based upon increases in the
wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over
the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base
rent to cover escalations. Electricity is most often supplied by the landlord either on a sub-metered basis, or rent inclusion basis
(i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or
increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and
freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the
tenant paying additional rent only for services which exceed base building services or for services which are provided outside
normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the
current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the
actual expenses for the current year.
Rental revenue is recognized if collectability is probable. If collectability of substantially all of the lease payments is
assessed as not probable, any difference between the rental revenue recognized to date and the lease payments that have been
collected is recognized as a current-period adjustment to rental revenue. A subsequent change in the assessment of collectability
to probable may result in a current-period adjustment to rental revenue for any difference between the rental revenue that would
have been recognized if collectability had always been assessed as probable and the rental revenue recognized to date.
We recognize lease concessions related to COVID-19, such as rent deferrals and abatements, in accordance with the
Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. When
total cash flows resulting from the modified lease are not substantially similar to the cash flows in the original lease, we account
for the concession agreement as a new lease.
The Company provides its tenants with certain customary services for lease contracts such as common area maintenance
and general security. We have elected to combine the non-lease components with the lease components of our operating lease
agreements and account for them as a single lease component in accordance with ASC 842.
We record a gain or loss on sale of real estate assets when we no longer hold a controlling financial interest in the entity
holding the real estate, a contract exists with a third party and that third party has control of the assets acquired.
Investment income on debt and preferred equity investments is accrued based on the contractual terms of the instruments
and when, in the opinion of management, it is deemed collectible. Some debt and preferred equity investments provide for
accrual of interest at specified rates, which differ from current payment terms. Interest is recognized on such loans at the accrual
rate subject to management's determination that accrued interest is collectible. If management cannot make this determination,
interest income above the current pay rate is recognized only upon actual receipt.
Deferred origination fees, original issue discounts and loan origination costs, if any, are recognized as an adjustment to
interest income over the terms of the related investments using the effective interest method. Fees received in connection with
loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment
to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield
adjustment on the effective interest method based on expected cash flows through the expected maturity date of the related
investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to
recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the
investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral,
we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual
cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, the collection of which is expected, are
also recognized over the term of the loan as an adjustment to yield.
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments
become 90 days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest
income recognition is resumed on any non-accrual debt or preferred equity investment that is when such non-accrual debt or
preferred equity investment becomes contractually current and performance is demonstrated to be resumed. Interest is recorded
as income on impaired loans only to the extent cash is received. We consider an investment to be past due when amounts
contractually due have not been paid.
We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the
criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of
the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or
premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Debt and Preferred Equity Investments
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC
326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying
value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss
and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts
are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or
acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical
loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data and
external data which may include, among others, governmental economic projections for the New York City Metropolitan area,
public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset class and
adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we may also
use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be collected
for each outcome.
The evaluation of the possible credit deterioration associated with the performance and/or value of the underlying
collateral property as well as the financial and operating capability of the borrower/sponsor requires significant judgment,
which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through
“3,” from lower risk to higher risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 -
Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. Loans with risk ratings of 2 or 3
are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our
expectations of current conditions, historical loss information and supportable forecasts described above or whether risk
characteristics specific to the loan warrant the use of a probability-weighted model.
Financing investments that are classified as held for sale are carried at the expected amount to be collected or fair market
value using available market information obtained through consultation with dealers or other originators of such investments as
well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management
may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its
expected amount to be collected.
Other financing receivables that are included in balance sheet line items other than the Debt and Preferred Equity
Investments line are also measured at the net amount expected to the be collected.
Accrued interest receivable amounts related to these debt and preferred equity investment and other financing receivables
are recorded at the net amount expected to be collected within Other assets in the consolidated balance sheets. Write offs of
accrued interest receivables are recognized as an expense for loan loss and other investment reserves.
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Results of Operations
Comparison of the year ended December 31, 2020 to the year ended December 31, 2019
The following comparison for the year ended December 31, 2020, or 2020, to the year ended December 31, 2019, or
2019, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2019 and still owned by
us in the same manner at December 31, 2020 (Same-Store Properties totaled 28 of our 38 consolidated operating
properties),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2020 and 2019 and all
non-Same-Store Properties, including properties that are under development or redevelopment,
iii. "Disposed Properties" which represents all properties or interests in properties sold in 2020 and 2019, and
iv. “Other,” which represents properties where we sold an interest resulting in deconsolidation and corporate level items
not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.
(in millions)
Rental revenue
Investment income
Other income
Total revenues
Same-Store
Disposed
Other
Consolidated
2020
2019
$
Change
%
Change
2020
2019
2020
2019
2020
2019
$
Change
%
Change
$ 727.6 $ 756.9 $ (29.3)
(3.9) % $ 28.9 $ 95.5 $ 47.9 $ 131.2 $ 804.4 $ 983.6 $ (179.2)
—
33.4
—
—
— % —
—
120.2
195.6
120.2
195.6
(75.4)
9.4
24.0
255.3 %
3.6
4.6
91.2
45.8
128.2
59.8
68.4
114.4 %
761.0
766.3
(5.3)
(0.7) % 32.5
100.1
259.3
372.6
1,052.8
1,239.0
(186.2)
(15.0) %
(18.2) %
(38.5) %
Total space available
Leased space commenced during the year:
Transaction related costs
Marketing, general and
administrative
—
—
Property operating expenses
335.9
352.7
(16.8)
(4.8) %
6.9
25.7
45.7
80.3
388.5
458.7
(70.2)
—
—
— % —
—
0.5
0.7
0.5
0.7
(0.2)
(15.3) %
(28.6) %
Total leased space commenced
883,650
940,563 $
76.44 $
69.31 $
59.35
—
—
— % —
—
91.8
100.9
91.8
100.9
(9.1)
(9.0) %
Total available space at end of year
1,717,735
335.9
352.7
(16.8)
(4.8) %
6.9
25.7
138.0
181.9
480.8
560.3
(79.5)
(14.2) %
$ (128.5) $ (202.2)
73.7
(36.4) %
(313.7)
(272.4)
(41.3)
15.2 %
(25.2)
(34.5)
9.3
(27.0) %
3.0
76.2
(73.2)
(96.1) %
187.5
69.4
118.1
170.2 %
215.5
(16.7)
232.2
(1,390.4) %
(60.5)
(7.0)
(53.5)
764.3 %
(35.3)
—
(35.3)
$ 414.8 $ 291.5 $ 123.3
— %
42.3 %
Other income (expenses):
Interest expense and
amortization of deferred
financing costs, net of
interest income
Depreciation and
amortization
Equity in net (loss) income
from unconsolidated joint
ventures
Equity in net gain on sale of
interest in unconsolidated
joint venture/real estate
Purchase price and other fair
value adjustment
Gain (loss) on sale of real
estate, net
Depreciable real estate
reserves and impairments
Loan loss and other
investment reserves, net of
recoveries
Net income
Rental Revenue
Rental revenues decreased primarily due to a) our Disposed Properties ($66.6 million), b) Credit Suisse vacating its
space at One Madison Avenue in January 2020 pursuant to an agreement to terminate its lease early so the property can be
redeveloped ($50.2 million), c) lower contribution from our Same-Store properties ($29.3 million) driven by i) lower expense
escalation revenue resulting from lower operating expenses and ii) charge offs of billed tenant receivables and straight-line rent,
and d) increased vacancy at 625 Madison Avenue, which is expected to be redeveloped ($26.1 million).
Investment income decreased primarily as a result of a decrease in the weighted average balance and weighted average
yield of our debt and preferred equity investment portfolio. For the years ended December 31, 2020 and 2019, the weighted
average balance of our debt and preferred equity investment portfolio and the weighted average yield were $1.4 billion and
7.7%, respectively, compared to $2.1 billion and 8.8%, respectively. As of December 31, 2020, the debt and preferred equity
investment portfolio had a weighted average term to maturity of 2.3 years excluding extension options.
Other Income
Other income increased primarily due a) to higher lease termination income in 2020 as compared with 2019
($48.6 million), b) a settlement fee related to a previous real estate transaction ($20.2 million), and c) development fee income
of ($7.3 million) in 2020, offset by d) a decrease in leasing commission income in 2020 as compared to 2019 ($7.0 million).
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9
The following table presents a summary of the commenced leasing activity for the year ended December 31, 2020 in our
Manhattan portfolio:
Usable
SF
Rentable
SF
New
Cash
Rent (per
rentable
SF) (1)
Prev.
Escalated
Rent (per
rentable
SF) (2)
TI/LC
per
rentable
SF
Free
Rent (in
months)
Average
Lease
Term (in
years)
Space available at beginning of the year
1,306,757
Manhattan
Sold vacancies
Acquired vacancies
Property in redevelopment
Space which became available during the year(3)
(4,545)
42,800
(10,695)
1,170,246
90,528
6,294
1,267,068
2,601,385
• Office
• Retail
• Storage
• Office(4)
• Retail
• Storage
Early renewals
• Office
• Retail
• Storage
Total early renewals
Total commenced leases, including replaced
previous vacancy
• Office
• Retail
• Storage
Total commenced leases
Annual initial base rent.
(1)
(2)
(3)
(4)
1,185,290 rentable square feet.
Investment Income
consumer price index (CPI) adjustment.
777,511
104,800
1,339
835,150 $
68.24 $
65.37 $
104,164 $
142.74 $
107.30 $
1,249 $
35.74 $
37.41 $
58.82
64.32
—
499,520
105,563
15,833
620,916
513,010 $
67.87 $
71.03 $
17.76
40,238 $
239.85 $
211.64 $
7,070 $
37.56 $
37.01 $
—
—
560,318 $
79.84 $
80.70 $
16.26
1,348,160 $
68.10 $
67.82 $
144,402 $
169.80 $
145.19 $
8,319 $
37.28 $
37.06 $
43.20
46.40
—
1,500,881 $
77.71 $
74.20 $
43.27
6.7
8.6
3.4
6.9
4.2
1.5
1.9
3.9
5.8
6.6
2.1
5.8
9.9
16.9
3.9
10.7
4.8
2.2
5.3
4.6
8.0
12.8
5.1
8.4
Escalated rent includes base rent plus all additional amounts paid by the tenant in the form of real estate taxes, operating expenses, porters wage or a
Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.
Average starting office rent excluding new tenants replacing vacancies was $66.50 per rentable square feet for 672,280 rentable square feet. Average
starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $67.09 per rentable square feet for
Results of Operations
Comparison of the year ended December 31, 2020 to the year ended December 31, 2019
The following comparison for the year ended December 31, 2020, or 2020, to the year ended December 31, 2019, or
2019, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2019 and still owned by
us in the same manner at December 31, 2020 (Same-Store Properties totaled 28 of our 38 consolidated operating
properties),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2020 and 2019 and all
non-Same-Store Properties, including properties that are under development or redevelopment,
iii. "Disposed Properties" which represents all properties or interests in properties sold in 2020 and 2019, and
iv. “Other,” which represents properties where we sold an interest resulting in deconsolidation and corporate level items
not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.
(in millions)
Rental revenue
Investment income
Other income
Total revenues
Same-Store
Disposed
Other
$
%
Consolidated
$
2020
2019
Change
Change
2020
2019
2020
2019
2020
2019
Change
$ 727.6 $ 756.9 $ (29.3)
(3.9) % $ 28.9 $ 95.5 $ 47.9 $ 131.2 $ 804.4 $ 983.6 $ (179.2)
—
—
— % —
—
120.2
195.6
120.2
195.6
(75.4)
9.4
24.0
255.3 %
3.6
4.6
91.2
45.8
128.2
59.8
68.4
114.4 %
761.0
766.3
(5.3)
(0.7) % 32.5
100.1
259.3
372.6
1,052.8
1,239.0
(186.2)
(15.0) %
%
Change
(18.2) %
(38.5) %
(15.3) %
(28.6) %
—
33.4
—
—
Transaction related costs
Marketing, general and
administrative
Other income (expenses):
Interest expense and
amortization of deferred
financing costs, net of
interest income
Depreciation and
amortization
Equity in net (loss) income
from unconsolidated joint
ventures
Equity in net gain on sale of
interest in unconsolidated
joint venture/real estate
Purchase price and other fair
value adjustment
Gain (loss) on sale of real
estate, net
Depreciable real estate
reserves and impairments
Loan loss and other
investment reserves, net of
recoveries
Net income
Rental Revenue
$ (128.5) $ (202.2)
73.7
(36.4) %
(313.7)
(272.4)
(41.3)
15.2 %
(25.2)
(34.5)
9.3
(27.0) %
3.0
76.2
(73.2)
(96.1) %
187.5
69.4
118.1
170.2 %
215.5
(16.7)
232.2
(1,390.4) %
(60.5)
(7.0)
(53.5)
764.3 %
(35.3)
—
(35.3)
$ 414.8 $ 291.5 $ 123.3
— %
42.3 %
The following table presents a summary of the commenced leasing activity for the year ended December 31, 2020 in our
Manhattan portfolio:
Usable
SF
Rentable
SF
New
Cash
Rent (per
rentable
SF) (1)
Prev.
Escalated
Rent (per
rentable
SF) (2)
TI/LC
per
rentable
SF
Free
Rent (in
months)
Average
Lease
Term (in
years)
Manhattan
Space available at beginning of the year
1,306,757
Sold vacancies
Acquired vacancies
Property in redevelopment
Space which became available during the year(3)
• Office
• Retail
• Storage
Total space available
Leased space commenced during the year:
• Office(4)
• Retail
• Storage
(4,545)
42,800
(10,695)
1,170,246
90,528
6,294
1,267,068
2,601,385
777,511
104,800
1,339
835,150 $
68.24 $
65.37 $
104,164 $
142.74 $
107.30 $
1,249 $
35.74 $
37.41 $
58.82
64.32
—
Property operating expenses
335.9
352.7
(16.8)
(4.8) %
6.9
25.7
45.7
80.3
388.5
458.7
(70.2)
—
—
— % —
—
0.5
0.7
0.5
0.7
(0.2)
Total leased space commenced
883,650
940,563 $
76.44 $
69.31 $
59.35
—
—
— % —
—
91.8
100.9
91.8
100.9
(9.1)
(9.0) %
Total available space at end of year
1,717,735
335.9
352.7
(16.8)
(4.8) %
6.9
25.7
138.0
181.9
480.8
560.3
(79.5)
(14.2) %
Early renewals
• Office
• Retail
• Storage
Total early renewals
Total commenced leases, including replaced
previous vacancy
• Office
• Retail
• Storage
Total commenced leases
499,520
105,563
15,833
620,916
513,010 $
67.87 $
71.03 $
17.76
40,238 $
239.85 $
211.64 $
7,070 $
37.56 $
37.01 $
—
—
560,318 $
79.84 $
80.70 $
16.26
1,348,160 $
68.10 $
67.82 $
144,402 $
169.80 $
145.19 $
8,319 $
37.28 $
37.06 $
43.20
46.40
—
1,500,881 $
77.71 $
74.20 $
43.27
6.7
8.6
3.4
6.9
4.2
1.5
1.9
3.9
5.8
6.6
2.1
5.8
9.9
16.9
3.9
10.7
4.8
2.2
5.3
4.6
8.0
12.8
5.1
8.4
(1)
(2)
(3)
(4)
Annual initial base rent.
Escalated rent includes base rent plus all additional amounts paid by the tenant in the form of real estate taxes, operating expenses, porters wage or a
consumer price index (CPI) adjustment.
Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.
Average starting office rent excluding new tenants replacing vacancies was $66.50 per rentable square feet for 672,280 rentable square feet. Average
starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $67.09 per rentable square feet for
1,185,290 rentable square feet.
Investment Income
Rental revenues decreased primarily due to a) our Disposed Properties ($66.6 million), b) Credit Suisse vacating its
space at One Madison Avenue in January 2020 pursuant to an agreement to terminate its lease early so the property can be
redeveloped ($50.2 million), c) lower contribution from our Same-Store properties ($29.3 million) driven by i) lower expense
escalation revenue resulting from lower operating expenses and ii) charge offs of billed tenant receivables and straight-line rent,
and d) increased vacancy at 625 Madison Avenue, which is expected to be redeveloped ($26.1 million).
Investment income decreased primarily as a result of a decrease in the weighted average balance and weighted average
yield of our debt and preferred equity investment portfolio. For the years ended December 31, 2020 and 2019, the weighted
average balance of our debt and preferred equity investment portfolio and the weighted average yield were $1.4 billion and
7.7%, respectively, compared to $2.1 billion and 8.8%, respectively. As of December 31, 2020, the debt and preferred equity
investment portfolio had a weighted average term to maturity of 2.3 years excluding extension options.
Other Income
Other income increased primarily due a) to higher lease termination income in 2020 as compared with 2019
($48.6 million), b) a settlement fee related to a previous real estate transaction ($20.2 million), and c) development fee income
of ($7.3 million) in 2020, offset by d) a decrease in leasing commission income in 2020 as compared to 2019 ($7.0 million).
8
9
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Property Operating Expenses
Depreciable Real Estate Reserves and Impairments
Property operating expenses decreased primarily due to a) a reduction in variable operating expenses, such as utilities,
cleaning, and security, at our Same-Store properties ($24.3 million) as a result of lower physical occupancy at the properties
during the year related to COVID-19 and b) decreased operating expenses and real estate taxes at i) our Disposed properties
($18.8 million and $13.3 million, respectively) and ii) 625 Madison Avenue ($6.5 million and $10.3 million, respectively).
Marketing, General and Administrative Expenses
During the year ended December 31, 2020, we recorded charges related to a) 106 Spring Street ($39.7 million), b) 133
Greene Street ($14.1 million), and c) 712 Madison Avenue ($6.6 million). During the year ended December 31, 2019, we
recorded a charge related to 1010 Washington Boulevard in Stamford, Connecticut ($7.0 million).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2020, we recorded $12.3 million of losses related to certain debt and preferred
Marketing, general and administrative expenses decreased to $91.8 million for the year ended December 31, 2020,
equity investments that were sold and $23.0 million of loan loss and other investment reserves in conjunction with recording
compared to $100.9 million for the same period in 2019 due to reduced compensation expense.
debt and preferred equity investments and other financing receivables at the net amount expected to be collected. There were no
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, decreased primarily as a result of a) a
decrease in corporate interest expense due to lower LIBOR in 2020 ($21.7 million), b) the repayment of an issuance of senior
unsecured notes in the first quarter of 2020 ($20.9 million), c) interest capitalization in connection with a property that is under
development ($18.3 million) and d) the repayment of the Master Repurchase Agreement in the second quarter of 2020
($10.3 million). The weighted average consolidated debt balance outstanding was $5.8 billion for the year ended December 31,
2020 as compared to $6.1 billion for the year ended December 31, 2019. The consolidated weighted average interest rate
decreased to 3.06% for the year ended December 31, 2020 as compared to 4.00% for the year ended December 31, 2019 as a
result of lower LIBOR.
Depreciation and Amortization
Depreciation and amortization increased primarily due to accelerated depreciation at One Madison Avenue related to the
redevelopment of the property ($55.2 million), offset by decreased depreciation and amortization at our Disposed properties
($18.5 million).
Equity in net (loss) income from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures decreased primarily as a result of increased contribution from 280
Park Avenue resulting from a) lower interest expense ($10.3 million) and b) a tax abatement benefit recognized in 2020 ($2.4
million).
Equity in net gain on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2020, we recognized a gain on the sale of our joint venture interest in 333 East 22nd
Street ($3.0 million). During the year ended December 31, 2019, we recognized gains on the sales of our joint venture interests
in 521 Fifth Avenue ($57.4 million) and 131 Spring Street ($16.7 million).
Purchase price and other fair value adjustments
In December 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in
the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our
remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment
of $187.5 million.
In August 2019, the Company sold a 49% interest in 115 Spring Street, which resulted in the deconsolidation of our
remaining 51% interest. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of
$3.8 million.
In May 2019, the Company closed on the acquisition of a majority and controlling interest in 410 Tenth Avenue. We
recorded the assets acquired and liabilities assumed at fair value which resulted in the recognition of a fair value adjustment of
$67.6 million million.
Gain (Loss) on Sale of Real Estate, Net
During the year ended December 31, 2020, we recognized gains on the sales of our interests in a) 315 West 33rd Street -
"The Olivia" ($72.3 million), b) the retail condominium at 609 Fifth Avenue ($65.4 million), c) 410 Tenth Avenue ($56.4
million), d) 15 Beekman ($17.7 million), e) Williamsburg Terrace ($11.8 million) and f) 400 East 58th Street ($8.3 million),
and a loss on sale related to our interest in 1055 Washington Boulevard in Stamford, Connecticut. During the year ended
December 31, 2019, we recognized a loss on the sale of our interest in 562 Fifth Avenue ($26.6 million) and gains on the sales
of our interests in a) 1640 Flatbush Avenue ($5.5 million), b) 115 Spring Street ($3.3 million), and c) the Suburban Properties
($1.8 million). The Suburban Properties consist of 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive,
and 500 Summit Lake Drive.
loan loss reserves for the year ended December 31, 2019.
Comparison of the year ended December 31, 2019 to the year ended December 31, 2018
For a comparison of the year ended December 31, 2019 to the year ended December 31, 2018, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year
ended December 31, 2019, which was filed with the SEC on February 28, 2020.
Liquidity and Capital Resources
We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for
working capital, acquisitions, development or redevelopment of properties, tenant improvements, leasing costs, share
repurchases, dividends to shareholders, distributions to unitholders, repurchases or repayments of outstanding indebtedness and
for debt and preferred equity investments will include:
Net proceeds from divestitures of properties and redemptions, participations, dispositions and repayments of
(1)
(2)
(3)
(4)
(5)
(6)
Cash flow from operations;
Cash on hand;
debt and preferred equity investments;
Borrowings under the revolving credit facility;
Other forms of secured or unsecured financing; and
Proceeds from common or preferred equity or debt offerings by the Company or the Operating Partnership
(including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred
securities).
Cash flow from operations is primarily dependent upon the collectability of rent, the occupancy level of our portfolio, the
net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants
and the level of operating and other costs. Additionally, we believe that our debt and preferred equity investment program will
continue to serve as a source of operating cash flow.
As of the date of this filing, we have collected gross tenant billings for 2020 of 95.5% overall, including 97.9% from
office tenants and 85.4% from retail tenants.
The combined aggregate principal maturities of our property mortgages and other loans payable, Federal Home Loan
Bank of New York ("FHLB") facilities, corporate obligations and our share of joint venture debt, including as-of-right
extension options, as of December 31, 2020 were as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
Property mortgages and
other loans
FHLB facilities
Corporate obligations
$
250,727 $
264,202 $
566,599 $
278,034 $
829 $
580,969 $ 1,941,360
60,000
350,000
—
—
—
—
—
60,000
800,000
1,410,000
200,000
100,000
100,000
2,960,000
Joint venture debt-our share
1,085,279
540,947
491,066
617,010
1,385,256
552,813
4,672,371
Total
$ 1,746,006 $ 1,605,149 $ 2,467,665 $ 1,095,044 $ 1,486,085 $ 1,233,782 $ 9,633,731
As of December 31, 2020, we had liquidity of $1.7 billion, comprised of $1.4 billion of availability under our revolving
credit facility and $0.3 billion of consolidated cash on hand, inclusive of $28.6 million of marketable securities. This liquidity
excludes $122.2 million representing our share of cash at unconsolidated joint venture properties. We may seek to divest of
properties, interests in properties, debt and preferred equity investments or access private and public debt and equity capital
when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient
levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential
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11
Property Operating Expenses
Depreciable Real Estate Reserves and Impairments
Property operating expenses decreased primarily due to a) a reduction in variable operating expenses, such as utilities,
cleaning, and security, at our Same-Store properties ($24.3 million) as a result of lower physical occupancy at the properties
during the year related to COVID-19 and b) decreased operating expenses and real estate taxes at i) our Disposed properties
($18.8 million and $13.3 million, respectively) and ii) 625 Madison Avenue ($6.5 million and $10.3 million, respectively).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses decreased to $91.8 million for the year ended December 31, 2020,
compared to $100.9 million for the same period in 2019 due to reduced compensation expense.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, decreased primarily as a result of a) a
decrease in corporate interest expense due to lower LIBOR in 2020 ($21.7 million), b) the repayment of an issuance of senior
unsecured notes in the first quarter of 2020 ($20.9 million), c) interest capitalization in connection with a property that is under
development ($18.3 million) and d) the repayment of the Master Repurchase Agreement in the second quarter of 2020
($10.3 million). The weighted average consolidated debt balance outstanding was $5.8 billion for the year ended December 31,
2020 as compared to $6.1 billion for the year ended December 31, 2019. The consolidated weighted average interest rate
decreased to 3.06% for the year ended December 31, 2020 as compared to 4.00% for the year ended December 31, 2019 as a
result of lower LIBOR.
Depreciation and Amortization
($18.5 million).
million).
Depreciation and amortization increased primarily due to accelerated depreciation at One Madison Avenue related to the
redevelopment of the property ($55.2 million), offset by decreased depreciation and amortization at our Disposed properties
Equity in net (loss) income from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures decreased primarily as a result of increased contribution from 280
Park Avenue resulting from a) lower interest expense ($10.3 million) and b) a tax abatement benefit recognized in 2020 ($2.4
Equity in net gain on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2020, we recognized a gain on the sale of our joint venture interest in 333 East 22nd
Street ($3.0 million). During the year ended December 31, 2019, we recognized gains on the sales of our joint venture interests
in 521 Fifth Avenue ($57.4 million) and 131 Spring Street ($16.7 million).
Purchase price and other fair value adjustments
In December 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in
the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our
remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment
In August 2019, the Company sold a 49% interest in 115 Spring Street, which resulted in the deconsolidation of our
remaining 51% interest. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of
In May 2019, the Company closed on the acquisition of a majority and controlling interest in 410 Tenth Avenue. We
recorded the assets acquired and liabilities assumed at fair value which resulted in the recognition of a fair value adjustment of
of $187.5 million.
$3.8 million.
$67.6 million million.
Gain (Loss) on Sale of Real Estate, Net
During the year ended December 31, 2020, we recognized gains on the sales of our interests in a) 315 West 33rd Street -
"The Olivia" ($72.3 million), b) the retail condominium at 609 Fifth Avenue ($65.4 million), c) 410 Tenth Avenue ($56.4
million), d) 15 Beekman ($17.7 million), e) Williamsburg Terrace ($11.8 million) and f) 400 East 58th Street ($8.3 million),
and a loss on sale related to our interest in 1055 Washington Boulevard in Stamford, Connecticut. During the year ended
December 31, 2019, we recognized a loss on the sale of our interest in 562 Fifth Avenue ($26.6 million) and gains on the sales
of our interests in a) 1640 Flatbush Avenue ($5.5 million), b) 115 Spring Street ($3.3 million), and c) the Suburban Properties
($1.8 million). The Suburban Properties consist of 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive,
and 500 Summit Lake Drive.
During the year ended December 31, 2020, we recorded charges related to a) 106 Spring Street ($39.7 million), b) 133
Greene Street ($14.1 million), and c) 712 Madison Avenue ($6.6 million). During the year ended December 31, 2019, we
recorded a charge related to 1010 Washington Boulevard in Stamford, Connecticut ($7.0 million).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2020, we recorded $12.3 million of losses related to certain debt and preferred
equity investments that were sold and $23.0 million of loan loss and other investment reserves in conjunction with recording
debt and preferred equity investments and other financing receivables at the net amount expected to be collected. There were no
loan loss reserves for the year ended December 31, 2019.
Comparison of the year ended December 31, 2019 to the year ended December 31, 2018
For a comparison of the year ended December 31, 2019 to the year ended December 31, 2018, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year
ended December 31, 2019, which was filed with the SEC on February 28, 2020.
Liquidity and Capital Resources
We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for
working capital, acquisitions, development or redevelopment of properties, tenant improvements, leasing costs, share
repurchases, dividends to shareholders, distributions to unitholders, repurchases or repayments of outstanding indebtedness and
for debt and preferred equity investments will include:
(1)
(2)
(3)
(4)
(5)
(6)
Cash flow from operations;
Cash on hand;
Net proceeds from divestitures of properties and redemptions, participations, dispositions and repayments of
debt and preferred equity investments;
Borrowings under the revolving credit facility;
Other forms of secured or unsecured financing; and
Proceeds from common or preferred equity or debt offerings by the Company or the Operating Partnership
(including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred
securities).
Cash flow from operations is primarily dependent upon the collectability of rent, the occupancy level of our portfolio, the
net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants
and the level of operating and other costs. Additionally, we believe that our debt and preferred equity investment program will
continue to serve as a source of operating cash flow.
As of the date of this filing, we have collected gross tenant billings for 2020 of 95.5% overall, including 97.9% from
office tenants and 85.4% from retail tenants.
The combined aggregate principal maturities of our property mortgages and other loans payable, Federal Home Loan
Bank of New York ("FHLB") facilities, corporate obligations and our share of joint venture debt, including as-of-right
extension options, as of December 31, 2020 were as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
Property mortgages and
other loans
FHLB facilities
Corporate obligations
$
250,727 $
264,202 $
566,599 $
278,034 $
829 $
580,969 $ 1,941,360
60,000
350,000
—
—
—
—
—
60,000
800,000
1,410,000
200,000
100,000
100,000
2,960,000
Joint venture debt-our share
1,085,279
540,947
491,066
617,010
1,385,256
552,813
4,672,371
Total
$ 1,746,006 $ 1,605,149 $ 2,467,665 $ 1,095,044 $ 1,486,085 $ 1,233,782 $ 9,633,731
As of December 31, 2020, we had liquidity of $1.7 billion, comprised of $1.4 billion of availability under our revolving
credit facility and $0.3 billion of consolidated cash on hand, inclusive of $28.6 million of marketable securities. This liquidity
excludes $122.2 million representing our share of cash at unconsolidated joint venture properties. We may seek to divest of
properties, interests in properties, debt and preferred equity investments or access private and public debt and equity capital
when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient
levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential
10
11
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refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt obligations, as described above, upon
maturity, if not before.
We have investments in several real estate joint ventures with various partners who we consider to be financially stable
and who have the ability to fund a capital call when needed. Most of our joint ventures are financed with non-recourse debt. We
believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of
outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.
Cash Flows
The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1.
Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the years presented
below.
Cash, restricted cash, and cash equivalents were $372.8 million and $241.4 million at December 31, 2020 and 2019,
respectively, representing a increase of $131.4 million. The increase was a result of the following changes in cash flows (in
thousands):
Year Ended December 31,
2020
2019
(Decrease)
Increase
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
$
$
$
554,236 $
1,056,430 $
(1,479,301) $
376,473 $
114,494 $
(528,650) $
177,763
941,936
(950,651)
Our principal sources of operating cash flow are the properties in our consolidated and joint venture portfolios and our
debt and preferred equity portfolio. These sources provide a relatively consistent stream of cash flow that provides us with
resources to pay operating expenses, debt service, and fund dividend and distribution requirements. Our debt and preferred
equity investments and joint venture investments also provide a steady stream of operating cash flow to us.
Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and
nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development,
leasing, financing and property management skills, and invest in existing buildings that meet our investment criteria. During the
year ended December 31, 2020, when compared to the year ended December 31, 2019, we used cash primarily for the following
investing activities (in thousands):
Acquisitions of real estate
Capital expenditures and capitalized interest
Escrow cash-capital improvements/acquisition deposits/deferred purchase price
Joint venture investments
Distributions from joint ventures
Proceeds from sales of real estate/partial interest in property
Debt and preferred equity and other investments
Increase in net cash provided by investing activities
$
175,745
(205,154)
5,239
58,367
45,552
904,080
(41,893)
$
941,936
Funds spent on capital expenditures, which are comprised of building and tenant improvements, increased from $253.0
million for the year ended December 31, 2019 to $458.1 million for the year ended December 31, 2020 due to increased costs
incurred in connection with our development and redevelopment properties.
We generally fund our investment activity through the sale of real estate, the sale of debt and preferred equity
investments, property-level financing, our credit facilities, senior unsecured notes, and construction loans. From time to time,
the Company may issue common or preferred stock, or the Operating Partnership may issue common or preferred units of
limited partnership interest. During the year ended December 31, 2020, when compared to the year ended December 31, 2019,
we used cash for the following financing activities (in thousands):
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12
Proceeds from our debt obligations
Repayments of our debt obligations
Net distribution to noncontrolling interests
Other financing activities
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common stock
Redemption of preferred stock
Acquisition of subsidiary interest from noncontrolling interest
Dividends and distributions paid
Increase in net cash used in financing activities
Capitalization
$
613,908
(1,261,752)
(80,675)
(49,978)
672
(144,084)
(64,608)
24,309
12,390
$
(949,818)
Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares
of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000
shares of preferred stock, $0.01 par value per share. As of December 31, 2020, 68,508,127 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
Share Repurchase Program
In August 2016, our Board of Directors approved a share repurchase program under which we can repurchase up to $1.0
billion of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the
size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth
quarter of 2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
At December 31, 2020, repurchases executed under the program were as follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
share
$104.61
$99.03
$86.06
$62.39
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
8,105,881
9,468,617
4,465,857
8,538,995
13
refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt obligations, as described above, upon
maturity, if not before.
We have investments in several real estate joint ventures with various partners who we consider to be financially stable
and who have the ability to fund a capital call when needed. Most of our joint ventures are financed with non-recourse debt. We
believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of
outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.
Cash Flows
below.
thousands):
The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1.
Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the years presented
Cash, restricted cash, and cash equivalents were $372.8 million and $241.4 million at December 31, 2020 and 2019,
respectively, representing a increase of $131.4 million. The increase was a result of the following changes in cash flows (in
Year Ended December 31,
2020
2019
(Decrease)
Increase
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
$
$
$
554,236 $
1,056,430 $
(1,479,301) $
376,473 $
114,494 $
(528,650) $
177,763
941,936
(950,651)
Our principal sources of operating cash flow are the properties in our consolidated and joint venture portfolios and our
debt and preferred equity portfolio. These sources provide a relatively consistent stream of cash flow that provides us with
resources to pay operating expenses, debt service, and fund dividend and distribution requirements. Our debt and preferred
equity investments and joint venture investments also provide a steady stream of operating cash flow to us.
Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and
nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development,
leasing, financing and property management skills, and invest in existing buildings that meet our investment criteria. During the
year ended December 31, 2020, when compared to the year ended December 31, 2019, we used cash primarily for the following
investing activities (in thousands):
Acquisitions of real estate
Capital expenditures and capitalized interest
Escrow cash-capital improvements/acquisition deposits/deferred purchase price
Joint venture investments
Distributions from joint ventures
Proceeds from sales of real estate/partial interest in property
Debt and preferred equity and other investments
Increase in net cash provided by investing activities
$
175,745
(205,154)
5,239
58,367
45,552
904,080
(41,893)
$
941,936
Funds spent on capital expenditures, which are comprised of building and tenant improvements, increased from $253.0
million for the year ended December 31, 2019 to $458.1 million for the year ended December 31, 2020 due to increased costs
incurred in connection with our development and redevelopment properties.
We generally fund our investment activity through the sale of real estate, the sale of debt and preferred equity
investments, property-level financing, our credit facilities, senior unsecured notes, and construction loans. From time to time,
the Company may issue common or preferred stock, or the Operating Partnership may issue common or preferred units of
limited partnership interest. During the year ended December 31, 2020, when compared to the year ended December 31, 2019,
we used cash for the following financing activities (in thousands):
Proceeds from our debt obligations
Repayments of our debt obligations
Net distribution to noncontrolling interests
Other financing activities
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common stock
Redemption of preferred stock
Acquisition of subsidiary interest from noncontrolling interest
Dividends and distributions paid
Increase in net cash used in financing activities
Capitalization
$
613,908
(1,261,752)
(80,675)
(49,978)
672
(144,084)
(64,608)
24,309
12,390
$
(949,818)
Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares
of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000
shares of preferred stock, $0.01 par value per share. As of December 31, 2020, 68,508,127 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
Share Repurchase Program
In August 2016, our Board of Directors approved a share repurchase program under which we can repurchase up to $1.0
billion of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the
size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth
quarter of 2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
At December 31, 2020, repurchases executed under the program were as follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
Shares repurchased
Average price paid per
share
8,105,881
9,468,617
4,465,857
8,538,995
$104.61
$99.03
$86.06
$62.39
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
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Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
Indebtedness
In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock
purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our
common stock under the DRSPP. The DRSPP commenced on September 24, 2001.
The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments
and/or stock purchases under the DRSPP for the years ended December 31, 2020, 2019, and 2018, respectively (dollars in
thousands):
Year Ended December 31,
2020
2019
2018
Shares of common stock issued
16,676
3,757
Dividend reinvestments/stock purchases under the DRSPP
$
1,006 $
334 $
1,359
136
Fourth Amended and Restated 2005 Stock Option and Incentive Plan
The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of stockholders.
Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000
fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based
awards under the 2005 Plan. As of December 31, 2020, 3.1 million fungible units were available for issuance under the 2005
Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-
Employee Directors' Deferral Program and LTIP Units.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee
directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless
otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The
program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock
upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board
of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee
director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each
participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend
rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock
units.
During the year ended December 31, 2020, 20,753 phantom stock units and 8,417 shares of common stock were issued to
our board of directors. We recorded compensation expense of $2.3 million during the year ended December 31, 2020 related to
the Deferred Compensation Plan. As of December 31, 2020, there were 140,775 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our
employees to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is
intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to
enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP
became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to
adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration
statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of
successive offering periods. Each offering period will be three months in duration and will begin on the first day of each
calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible
employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common
stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period.
The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of December 31, 2020, 156,780
shares of our common stock had been issued under the ESPP.
The table below summarizes our consolidated mortgages and other loans payable, 2017 credit facility, senior unsecured
notes and trust preferred securities outstanding at December 31, 2020 and 2019, (amount in thousands).
Debt, preferred equity, and other investments subject to variable rate
Net exposure to variable rate debt
Debt Summary:
Balance
Fixed rate
Variable rate—hedged
Total fixed rate
Total variable rate
Total debt
Percent of Total Debt:
Fixed rate
Variable rate (1)
Total
Fixed rate
Variable rate
Effective interest rate
Effective Interest Rate for the Year:
$
$
December 31,
2020
2019
1,985,572
$
1,150,000
3,135,572
1,827,677
4,963,249
$
345,877
1,481,800
63.2 %
36.8 %
100.0 %
3.65 %
2.30 %
2.91 %
2,536,286
1,000,000
3,536,286
2,018,434
5,554,720
618,885
1,399,549
63.7 %
36.3 %
100.0 %
4.05 %
3.93 %
3.85 %
(1)
Inclusive of the mitigating effect of our debt, preferred equity, and other investments subject to variable rates, the percent of total debt of our net
exposure to variable rate debt was 32.1% and 28.4% as of December 31, 2020 and December 31, 2019, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.14% and 1.76%
at December 31, 2020 and 2019, respectively). Our consolidated debt at December 31, 2020 had a weighted average term to
maturity of 2.87 years.
Certain of our debt and equity investments and other investments, with carrying values of $0.3 billion at December 31,
2020 and $0.6 billion at December 31, 2019, are variable rate investments, which mitigates our exposure to interest rate
changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net percent of our
variable rate debt to total debt was 32.1% and 28.4%, respectively.
As of December 31, 2020, our total mortgage debt (excluding our share of joint venture mortgage debt of $4.7 billion)
consisted of $1.1 billion of fixed rate debt, including swapped variable rate debt, with an effective weighted average interest
rate of 4.31% and $0.9 billion of variable rate debt with an effective weighted average interest rate of 2.77%.
Mortgage Financing
Corporate Indebtedness
2017 Credit Facility
In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was
originally entered into by the Company in November 2012, or the 2012 credit facility. As of December 31, 2020, the 2017
credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0
million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024,
respectively. The revolving credit facility has two six-month as-of-right extension options to March 31, 2023. We also have an
option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the
maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional
commitments from our existing lenders and other financial institutions.
As of December 31, 2020, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5
basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans
under Term Loan A, and (iii) 85 basis points to 165 basis points for loans under Term Loan B, in each case based on the credit
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14
15
Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
Indebtedness
In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock
The table below summarizes our consolidated mortgages and other loans payable, 2017 credit facility, senior unsecured
purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our
notes and trust preferred securities outstanding at December 31, 2020 and 2019, (amount in thousands).
common stock under the DRSPP. The DRSPP commenced on September 24, 2001.
The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments
and/or stock purchases under the DRSPP for the years ended December 31, 2020, 2019, and 2018, respectively (dollars in
thousands):
Shares of common stock issued
Dividend reinvestments/stock purchases under the DRSPP
$
1,006 $
334 $
Year Ended December 31,
2020
2019
2018
16,676
3,757
1,359
136
Debt Summary:
Balance
Fixed rate
Variable rate—hedged
Total fixed rate
Total variable rate
Total debt
Fourth Amended and Restated 2005 Stock Option and Incentive Plan
Debt, preferred equity, and other investments subject to variable rate
The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Net exposure to variable rate debt
Percent of Total Debt:
Fixed rate
Variable rate (1)
Total
Effective Interest Rate for the Year:
Fixed rate
Variable rate
Effective interest rate
$
$
December 31,
2020
2019
1,985,572
$
1,150,000
3,135,572
1,827,677
4,963,249
$
345,877
1,481,800
63.2 %
36.8 %
100.0 %
3.65 %
2.30 %
2.91 %
2,536,286
1,000,000
3,536,286
2,018,434
5,554,720
618,885
1,399,549
63.7 %
36.3 %
100.0 %
4.05 %
3.93 %
3.85 %
(1)
Inclusive of the mitigating effect of our debt, preferred equity, and other investments subject to variable rates, the percent of total debt of our net
exposure to variable rate debt was 32.1% and 28.4% as of December 31, 2020 and December 31, 2019, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.14% and 1.76%
at December 31, 2020 and 2019, respectively). Our consolidated debt at December 31, 2020 had a weighted average term to
maturity of 2.87 years.
Certain of our debt and equity investments and other investments, with carrying values of $0.3 billion at December 31,
2020 and $0.6 billion at December 31, 2019, are variable rate investments, which mitigates our exposure to interest rate
changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net percent of our
variable rate debt to total debt was 32.1% and 28.4%, respectively.
Mortgage Financing
As of December 31, 2020, our total mortgage debt (excluding our share of joint venture mortgage debt of $4.7 billion)
consisted of $1.1 billion of fixed rate debt, including swapped variable rate debt, with an effective weighted average interest
rate of 4.31% and $0.9 billion of variable rate debt with an effective weighted average interest rate of 2.77%.
intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to
Corporate Indebtedness
2017 Credit Facility
In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was
originally entered into by the Company in November 2012, or the 2012 credit facility. As of December 31, 2020, the 2017
credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0
million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024,
respectively. The revolving credit facility has two six-month as-of-right extension options to March 31, 2023. We also have an
option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the
maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional
commitments from our existing lenders and other financial institutions.
As of December 31, 2020, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5
basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans
under Term Loan A, and (iii) 85 basis points to 165 basis points for loans under Term Loan B, in each case based on the credit
14
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Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of stockholders.
Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000
fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based
awards under the 2005 Plan. As of December 31, 2020, 3.1 million fungible units were available for issuance under the 2005
Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-
Employee Directors' Deferral Program and LTIP Units.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee
directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless
otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The
program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock
upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board
of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee
director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each
participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend
rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock
units.
During the year ended December 31, 2020, 20,753 phantom stock units and 8,417 shares of common stock were issued to
our board of directors. We recorded compensation expense of $2.3 million during the year ended December 31, 2020 related to
the Deferred Compensation Plan. As of December 31, 2020, there were 140,775 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our
employees to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is
enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP
became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to
adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration
statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of
successive offering periods. Each offering period will be three months in duration and will begin on the first day of each
calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible
employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common
stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period.
The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of December 31, 2020, 156,780
shares of our common stock had been issued under the ESPP.
rating assigned to the senior unsecured long term indebtedness of the Company. In instances where there are either only two
ratings available or where there are more than two and the difference between them is one rating category, the applicable rating
shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the
lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the
average is not a recognized category.
At December 31, 2020, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for
Term Loan A, and 100 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility
fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long
term indebtedness of the Company. As of December 31, 2020, the facility fee was 20 basis points.
As of December 31, 2020, we had $26.0 million of outstanding letters of credit, $110.0 million drawn under the revolving
credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.4 billion under the
2017 credit facility. At December 31, 2020 and December 31, 2019, the revolving credit facility had a carrying value of $105.3
million and $234.0 million, respectively, net of deferred financing costs. At December 31, 2020 and December 31, 2019, the
term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility.
The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
Federal Home Loan Bank of New York ("FHLB") Facility
As of December 31, 2020, the Company’s wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a
Vermont licensed captive insurance company, was a member of the Federal Home Loan Bank of New York, or FHLBNY. As a
member, Ticonderoga was able to borrow funds from the FHLBNY in the form of secured advances that bore interest at a
floating rate. In February 2021, Ticonderoga's membership in FHLB New York was terminated and all advances were repaid.
As of December 31, 2020, Ticonderoga had a total of $60.0 million in outstanding secured advances with an average spread of
21 basis points over 30-day LIBOR.
Master Repurchase Agreement
The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early
repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit
valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit
risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in
contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with
potential margin calls is further mitigated by our ability to collateralize the facility with additional assets from our portfolio of
debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity. As of
December 31, 2020, there have been no margin calls on the 2017 MRA.
In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bears
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate and is scheduled
to mature in June 2021, with a one-year extension option. At December 31, 2020, the facility had no outstanding balance.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2020 and 2019,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
August 7, 2018 (2)(3)
October 5, 2017 (2)
November 15, 2012 (4)
December 17, 2015 (5)
March 16, 2010 (6)
December
31,
2020
Unpaid
Principal
Balance
December
December
31,
2020
Accreted
Balance
31,
2019
Accreted
Balance
$
350,000 $
350,000 $
350,000
500,000
300,000
100,000
—
499,803
302,086
100,000
—
499,695
303,142
100,000
250,000
$ 1,250,000 $ 1,251,889 $ 1,502,837
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
1.52 %
3.25 %
4.50 %
4.27 %
3 August 2021
5 October 2022
10 December 2022
10 December 2025
Deferred financing costs, net
(3,670)
(5,990)
$ 1,250,000 $ 1,248,219 $ 1,496,847
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
The notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the
notes, plus unpaid accrued interest thereon to the redemption date. In April 2020, the Company entered into $350.0 million of fixed rate interest swaps at
In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $100.0 million of 4.50% senior unsecured notes due
(1)
(2)
(3)
(4)
(5)
(6)
a rate of 0.54375% through August 2021.
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
In March 2020, the notes were repaid.
Restrictive Covenants
The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants
which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional
indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with
financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed
charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to
unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default
is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to
continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2020 and 2019, we were in compliance
with all such covenants.
Junior Subordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities
through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating
Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR.
Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its
right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole
or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are
not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance
sheets and the related payments are classified as interest expense.
Interest Rate Risk
We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate
fluctuations are managed through either the use of interest rate derivative instruments and/or through our variable rate debt and
preferred equity investments. Based on the debt outstanding as of December 31, 2020, a hypothetical 100 basis point increase in
the floating rate interest rate curve would increase our consolidated annual interest cost, net of interest income from variable
rate debt and preferred equity investments, by $14.0 million and would increase our share of joint venture annual interest cost
by $20.6 million. At December 31, 2020, 32.1% of our $1.1 billion debt and preferred equity portfolio is indexed to LIBOR.
We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value
through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the
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rating assigned to the senior unsecured long term indebtedness of the Company. In instances where there are either only two
ratings available or where there are more than two and the difference between them is one rating category, the applicable rating
shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the
lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the
average is not a recognized category.
At December 31, 2020, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for
Term Loan A, and 100 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility
fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long
term indebtedness of the Company. As of December 31, 2020, the facility fee was 20 basis points.
As of December 31, 2020, we had $26.0 million of outstanding letters of credit, $110.0 million drawn under the revolving
credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.4 billion under the
2017 credit facility. At December 31, 2020 and December 31, 2019, the revolving credit facility had a carrying value of $105.3
million and $234.0 million, respectively, net of deferred financing costs. At December 31, 2020 and December 31, 2019, the
term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility.
The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
Federal Home Loan Bank of New York ("FHLB") Facility
As of December 31, 2020, the Company’s wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a
Vermont licensed captive insurance company, was a member of the Federal Home Loan Bank of New York, or FHLBNY. As a
member, Ticonderoga was able to borrow funds from the FHLBNY in the form of secured advances that bore interest at a
floating rate. In February 2021, Ticonderoga's membership in FHLB New York was terminated and all advances were repaid.
As of December 31, 2020, Ticonderoga had a total of $60.0 million in outstanding secured advances with an average spread of
21 basis points over 30-day LIBOR.
Master Repurchase Agreement
The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early
repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit
valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit
risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in
contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with
potential margin calls is further mitigated by our ability to collateralize the facility with additional assets from our portfolio of
debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity. As of
December 31, 2020, there have been no margin calls on the 2017 MRA.
In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bears
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate and is scheduled
to mature in June 2021, with a one-year extension option. At December 31, 2020, the facility had no outstanding balance.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2020 and 2019,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
August 7, 2018 (2)(3)
October 5, 2017 (2)
November 15, 2012 (4)
December 17, 2015 (5)
March 16, 2010 (6)
December
31,
2020
Unpaid
Principal
Balance
December
31,
2020
Accreted
Balance
December
31,
2019
Accreted
Balance
$
350,000 $
350,000 $
350,000
500,000
300,000
100,000
—
499,803
302,086
100,000
—
499,695
303,142
100,000
250,000
$ 1,250,000 $ 1,251,889 $ 1,502,837
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
1.52 %
3.25 %
4.50 %
4.27 %
3 August 2021
5 October 2022
10 December 2022
10 December 2025
Deferred financing costs, net
(3,670)
(5,990)
$ 1,250,000 $ 1,248,219 $ 1,496,847
(1)
(2)
(3)
(4)
(5)
(6)
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
The notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the
notes, plus unpaid accrued interest thereon to the redemption date. In April 2020, the Company entered into $350.0 million of fixed rate interest swaps at
a rate of 0.54375% through August 2021.
In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $100.0 million of 4.50% senior unsecured notes due
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
In March 2020, the notes were repaid.
Restrictive Covenants
The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants
which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional
indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with
financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed
charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to
unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default
is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to
continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2020 and 2019, we were in compliance
with all such covenants.
Junior Subordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities
through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating
Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR.
Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its
right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole
or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are
not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance
sheets and the related payments are classified as interest expense.
Interest Rate Risk
We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate
fluctuations are managed through either the use of interest rate derivative instruments and/or through our variable rate debt and
preferred equity investments. Based on the debt outstanding as of December 31, 2020, a hypothetical 100 basis point increase in
the floating rate interest rate curve would increase our consolidated annual interest cost, net of interest income from variable
rate debt and preferred equity investments, by $14.0 million and would increase our share of joint venture annual interest cost
by $20.6 million. At December 31, 2020, 32.1% of our $1.1 billion debt and preferred equity portfolio is indexed to LIBOR.
We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value
through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the
16
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Alliance Building Services, or Alliance, and its affiliates are partially owned by Gary Green, a son of Stephen L. Green,
who serves as a member and as the chairman emeritus of our board of directors, and provide services to certain properties
owned by us. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star
Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services,
respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual
tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service
Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain
threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease
Income earned from the profit participation, which is included in other income on the consolidated statements of
operations, was $1.4 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018,
We also recorded expenses, inclusive of capitalized expenses, of $13.3 million, $18.8 million and $18.8 million the years
ended December 31, 2020, 2019 and 2018, respectively, for these services (excluding services provided directly to tenants).
agreements.
respectively.
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.6 million and $0.6 million for the
In December 2016, we entered into agreements with entities owned and controlled by our Chairman and CEO, Marc
Holliday, and our President, Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt
project at the appraised fair market value for the interests acquired. This investment entitles these entities to receive
approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt
project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly,
subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any
amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received
distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that
the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the
time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire
amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0
million, respectively, which equal the fair market value of the interests acquired as of the date the investment agreements were
entered into as determined by an independent third party appraisal that we obtained.
derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through
earnings, or recognized in other comprehensive loss until the hedged item is recognized in earnings.
would only be paid out of available cash to the extent permitted under the 2017 credit facility and senior unsecured notes, we
must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.
Our long-term debt of $3.1 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected
by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of December 31, 2020 bore
interest based on a spread of LIBOR plus 18 basis points to LIBOR plus 340 basis points.
Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Contractual Obligations
The combined aggregate principal maturities of mortgages and other loans payable, the 2017 credit facility, senior
unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension
options and put options, estimated interest expense, and our obligations under our financing and operating leases, as of
December 31, 2020 are as follows (in thousands):
Property mortgages and
other loans
$
250,727 $
264,202 $
566,599 $
278,034 $
829 $
580,969 $ 1,941,360
2021
2022
2023
2024
2025
Thereafter
Total
MRA and FHLB facilities
60,000
Revolving credit facility
Unsecured term loans
—
—
—
—
—
—
110,000
—
—
1,300,000
200,000
Senior unsecured notes
350,000
800,000
Trust preferred securities
Financing leases
Operating leases
—
32,527
28,534
Estimated interest expense
141,815
Joint venture debt
1,085,279
—
3,523
26,228
122,975
540,947
—
—
3,570
23,921
60,953
—
—
3,641
23,939
42,990
—
—
—
100,000
—
3,810
24,026
31,901
—
—
—
—
100,000
260,550
504,360
55,103
60,000
110,000
1,500,000
1,250,000
100,000
307,621
631,008
455,737
491,066
617,010
1,385,256
552,813
4,672,371
years ended December 31, 2020, 2019, and 2018 respectively.
Total
$ 1,948,882 $ 1,757,875 $ 2,556,109 $ 1,165,614 $ 1,545,822 $ 2,053,795 $ 11,028,097
One Vanderbilt Investment
Off-Balance Sheet Arrangements
We have off-balance sheet investments, including joint ventures and debt and preferred equity investments. These
investments all have varying ownership structures. A majority of our joint venture arrangements are accounted for under the
equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and
financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and
Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated
financial statements.
Capital Expenditures
We estimate that for the remainder of the year ending December 31, 2021, we expect to incur $88.0 million of recurring
capital expenditures on existing consolidated properties and $192.2 million of development or redevelopment expenditures on
existing consolidated properties, of which $65.5 million will be funded by construction financing facilities. We expect our share
of capital expenditures at our joint venture properties will be $343.1 million, of which $248.1 million will be funded by
construction financing facilities. We expect to fund these capital expenditures from operating cash flow, existing liquidity, and
borrowings from construction financing facilities. Future property acquisitions may require substantial capital investments for
refurbishment and leasing costs.
Dividends/Distributions
We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership,
which are generated by the collection of property revenues, net of operating expenses, and interest on our debt and preferred
equity portfolio.
To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT
taxable income, determined before taking into consideration the dividends paid deduction and net capital gains.
Any dividend we pay may be in the form of cash, stock, or a combination thereof, subject to IRS limitations on the use of
stock for dividends. Additionally, if our REIT taxable income in a particular year exceeds the amount of cash dividends we pay
in that year, we may pay stock dividends in order to maintain our REIT status and avoid certain REIT-level taxes.
Based on our current annual dividend rate of $3.64 per share, we would pay $249.4 million in dividends to our common
stockholders on an annual basis. Before we pay any dividend, whether for Federal income tax purposes or otherwise, which
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derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through
earnings, or recognized in other comprehensive loss until the hedged item is recognized in earnings.
would only be paid out of available cash to the extent permitted under the 2017 credit facility and senior unsecured notes, we
must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.
Our long-term debt of $3.1 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected
Related Party Transactions
by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of December 31, 2020 bore
interest based on a spread of LIBOR plus 18 basis points to LIBOR plus 340 basis points.
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates are partially owned by Gary Green, a son of Stephen L. Green,
who serves as a member and as the chairman emeritus of our board of directors, and provide services to certain properties
owned by us. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star
Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services,
respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual
tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service
Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain
threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease
agreements.
Income earned from the profit participation, which is included in other income on the consolidated statements of
operations, was $1.4 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018,
respectively.
We also recorded expenses, inclusive of capitalized expenses, of $13.3 million, $18.8 million and $18.8 million the years
ended December 31, 2020, 2019 and 2018, respectively, for these services (excluding services provided directly to tenants).
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.6 million and $0.6 million for the
years ended December 31, 2020, 2019, and 2018 respectively.
Total
$ 1,948,882 $ 1,757,875 $ 2,556,109 $ 1,165,614 $ 1,545,822 $ 2,053,795 $ 11,028,097
One Vanderbilt Investment
In December 2016, we entered into agreements with entities owned and controlled by our Chairman and CEO, Marc
Holliday, and our President, Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt
project at the appraised fair market value for the interests acquired. This investment entitles these entities to receive
approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt
project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly,
subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any
amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received
distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that
the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the
time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire
amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0
million, respectively, which equal the fair market value of the interests acquired as of the date the investment agreements were
entered into as determined by an independent third party appraisal that we obtained.
Contractual Obligations
The combined aggregate principal maturities of mortgages and other loans payable, the 2017 credit facility, senior
unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension
options and put options, estimated interest expense, and our obligations under our financing and operating leases, as of
December 31, 2020 are as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
$
250,727 $
264,202 $
566,599 $
278,034 $
829 $
580,969 $ 1,941,360
1,300,000
200,000
—
110,000
—
—
3,570
23,921
60,953
—
—
—
—
3,641
23,939
42,990
—
—
—
—
100,000
3,810
24,026
31,901
—
—
—
—
100,000
260,550
504,360
55,103
60,000
110,000
1,500,000
1,250,000
100,000
307,621
631,008
455,737
Estimated interest expense
141,815
Joint venture debt
1,085,279
491,066
617,010
1,385,256
552,813
4,672,371
Senior unsecured notes
350,000
800,000
MRA and FHLB facilities
60,000
Property mortgages and
other loans
Revolving credit facility
Unsecured term loans
Trust preferred securities
Financing leases
Operating leases
—
—
—
32,527
28,534
—
—
—
—
3,523
26,228
122,975
540,947
Off-Balance Sheet Arrangements
We have off-balance sheet investments, including joint ventures and debt and preferred equity investments. These
investments all have varying ownership structures. A majority of our joint venture arrangements are accounted for under the
equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and
financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and
Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated
financial statements.
Capital Expenditures
We estimate that for the remainder of the year ending December 31, 2021, we expect to incur $88.0 million of recurring
capital expenditures on existing consolidated properties and $192.2 million of development or redevelopment expenditures on
existing consolidated properties, of which $65.5 million will be funded by construction financing facilities. We expect our share
of capital expenditures at our joint venture properties will be $343.1 million, of which $248.1 million will be funded by
construction financing facilities. We expect to fund these capital expenditures from operating cash flow, existing liquidity, and
borrowings from construction financing facilities. Future property acquisitions may require substantial capital investments for
refurbishment and leasing costs.
Dividends/Distributions
equity portfolio.
We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership,
which are generated by the collection of property revenues, net of operating expenses, and interest on our debt and preferred
To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT
taxable income, determined before taking into consideration the dividends paid deduction and net capital gains.
Any dividend we pay may be in the form of cash, stock, or a combination thereof, subject to IRS limitations on the use of
stock for dividends. Additionally, if our REIT taxable income in a particular year exceeds the amount of cash dividends we pay
in that year, we may pay stock dividends in order to maintain our REIT status and avoid certain REIT-level taxes.
Based on our current annual dividend rate of $3.64 per share, we would pay $249.4 million in dividends to our common
stockholders on an annual basis. Before we pay any dividend, whether for Federal income tax purposes or otherwise, which
18
19
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Messrs. Holliday and Mathias cannot monetize their interests until after stabilization of the property (50% within three
years after stabilization and 100% three years or more after stabilization). In addition, the agreement calls for us to repurchase
these interests in the event of a sale of One Vanderbilt or a transactional change of control of the Company. We also have the
right to repurchase these interests on the 7-year anniversary of the stabilization of the project or upon the occurrence of certain
separation events prior to the stabilization of the project relating to each of Messrs. Holliday’s and Mathias’s continued service
with us. The price paid upon monetization of the interests will equal the liquidation value of the interests at the time, with the
value of One Vanderbilt being based on its sale price, if applicable, or fair market value as determined by an independent third
party appraiser.
Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake
and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR")), within three property insurance
programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain
assets, such as the development of One Vanderbilt. Additionally, one of our captive insurance companies, Belmont Insurance
Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by
our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are
required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments.
However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we
experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as
well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants
requiring us to maintain insurance and we could default under our debt instruments if the cost and/or availability of certain
types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont and
Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net
leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with
such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be
maintained or adequately cover our risk of loss.
Funds from Operations
FFO is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in
accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not
compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company
does. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002, and subsequently
amended in December 2018, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or
losses) from sales of properties , and real estate related impairment charges, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and joint ventures.
The Company presents FFO because it considers it an important supplemental measure of the Company’s operating
performance and believes 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. The Company also uses FFO as one of several
criteria to determine performance-based compensation for members of its 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 real
estate related impairment charges, 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, and 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
the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including our
ability to make cash distributions.
FFO for the years ended December 31, 2020, 2019, and 2018 are as follows (in thousands):
Year Ended December 31,
2020
2019
2018
Net income attributable to SL Green common stockholders
$
356,105 $
255,484 $
232,312
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
272,358
192,426
10,142
279,507
187,147
12,210
Equity in net gain on sale of interest in unconsolidated joint venture/real
2,961
76,181
303,967
Depreciable real estate reserves and impairments
Gain (loss) on sale of real estate, net
Purchase price and other fair value adjustment
Depreciation on non-rental real estate assets
Cash flows provided by operating activities
Cash flows provided by investing activities
Cash flows used in financing activities
Funds from Operations attributable to SL Green common stockholders and unit
(7,047)
(16,749)
69,389
2,935
(227,543)
(30,757)
57,385
2,404
605,720
441,537
681,662
562,725 $
554,236 $
1,056,430 $
605,701 $
376,473 $
114,494 $
$
$
$
$
(1,479,301) $
(528,650) $
(1,094,112)
313,668
205,869
34,956
(60,454)
215,506
187,522
2,338
Add:
Less:
estate
holders
Inflation
Substantially all of our office leases provide for separate real estate tax and operating expense escalations as well as
operating expense recoveries based on increases in the Consumer Price Index or other measures such as porters' wage. In
addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases will be at least partially
offset by the contractual rent increases and expense escalations described above.
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies - Accounting Standards
Accounting Standards Updates
Updates" in the accompanying consolidated financial statements.
Forward-Looking Information
This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All
statements, other than statements of historical facts, included in this report that address activities, events or developments that
we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends
and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York
metropolitan area markets, business strategies, expansion and growth of our operations and other similar matters, are forward-
looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions, expected future developments and other factors we
believe are appropriate.
Forward-looking statements are not guarantees of future performance and actual results or developments may differ
materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally
identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project,"
"continue," or the negative of these words, or other similar words or terms.
Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our
actual results, performance or achievements to be materially different from future results, performance or achievements
expressed or implied by forward-looking statements made by us. These risks and uncertainties include:
•
the effect of general economic, business and financial conditions, and their effect on the New York City real
estate market in particular;
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20
21
Messrs. Holliday and Mathias cannot monetize their interests until after stabilization of the property (50% within three
FFO for the years ended December 31, 2020, 2019, and 2018 are as follows (in thousands):
years after stabilization and 100% three years or more after stabilization). In addition, the agreement calls for us to repurchase
these interests in the event of a sale of One Vanderbilt or a transactional change of control of the Company. We also have the
right to repurchase these interests on the 7-year anniversary of the stabilization of the project or upon the occurrence of certain
separation events prior to the stabilization of the project relating to each of Messrs. Holliday’s and Mathias’s continued service
with us. The price paid upon monetization of the interests will equal the liquidation value of the interests at the time, with the
value of One Vanderbilt being based on its sale price, if applicable, or fair market value as determined by an independent third
party appraiser.
Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake
and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR")), within three property insurance
programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain
assets, such as the development of One Vanderbilt. Additionally, one of our captive insurance companies, Belmont Insurance
Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by
our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are
required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments.
However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we
experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as
well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants
requiring us to maintain insurance and we could default under our debt instruments if the cost and/or availability of certain
types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont and
Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net
leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with
such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be
maintained or adequately cover our risk of loss.
Funds from Operations
FFO is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in
accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not
compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company
does. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002, and subsequently
amended in December 2018, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or
losses) from sales of properties , and real estate related impairment charges, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and joint ventures.
The Company presents FFO because it considers it an important supplemental measure of the Company’s operating
performance and believes 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. The Company also uses FFO as one of several
criteria to determine performance-based compensation for members of its 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 real
estate related impairment charges, 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, and 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
the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including our
ability to make cash distributions.
Net income attributable to SL Green common stockholders
$
356,105 $
255,484 $
232,312
Year Ended December 31,
2020
2019
2018
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Less:
Equity in net gain on sale of interest in unconsolidated joint venture/real
estate
Depreciable real estate reserves and impairments
Gain (loss) on sale of real estate, net
Purchase price and other fair value adjustment
Depreciation on non-rental real estate assets
Funds from Operations attributable to SL Green common stockholders and unit
holders
Cash flows provided by operating activities
Cash flows provided by investing activities
Cash flows used in financing activities
Inflation
313,668
205,869
34,956
272,358
192,426
10,142
279,507
187,147
12,210
2,961
76,181
303,967
(60,454)
215,506
187,522
2,338
(7,047)
(16,749)
69,389
2,935
562,725 $
554,236 $
1,056,430 $
605,701 $
376,473 $
114,494 $
(227,543)
(30,757)
57,385
2,404
605,720
441,537
681,662
(1,479,301) $
(528,650) $
(1,094,112)
$
$
$
$
Substantially all of our office leases provide for separate real estate tax and operating expense escalations as well as
operating expense recoveries based on increases in the Consumer Price Index or other measures such as porters' wage. In
addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases will be at least partially
offset by the contractual rent increases and expense escalations described above.
Accounting Standards Updates
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies - Accounting Standards
Updates" in the accompanying consolidated financial statements.
Forward-Looking Information
This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All
statements, other than statements of historical facts, included in this report that address activities, events or developments that
we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends
and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York
metropolitan area markets, business strategies, expansion and growth of our operations and other similar matters, are forward-
looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions, expected future developments and other factors we
believe are appropriate.
Forward-looking statements are not guarantees of future performance and actual results or developments may differ
materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally
identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project,"
"continue," or the negative of these words, or other similar words or terms.
Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our
actual results, performance or achievements to be materially different from future results, performance or achievements
expressed or implied by forward-looking statements made by us. These risks and uncertainties include:
•
the effect of general economic, business and financial conditions, and their effect on the New York City real
estate market in particular;
20
21
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•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
the effect of the on-going COVID-19 pandemic and the duration of the impact it will have on our business
and the industry as a whole;
dependence upon certain geographic markets;
risks of real estate acquisitions, dispositions, development and redevelopment, including the cost of
construction delays and cost overruns;
risks relating to debt and preferred equity investments;
availability and creditworthiness of prospective tenants and borrowers;
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy,
and increasing availability of sublease space;
availability of capital (debt and equity);
unanticipated increases in financing and other costs, including a rise in interest rates;
our ability to comply with financial covenants in our debt instruments;
our ability to maintain our status as a REIT;
risks of investing through joint venture structures, including the fulfillment by our partners of their financial
obligations;
the threat of terrorist attacks;
our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of
our insurance coverage, including as a result of environmental contamination; and
legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business
including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other
similar laws and regulations.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this
report and in our other filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Rate Risk" for
additional information regarding our exposure to interest rate fluctuations.
The table below presents the principal cash flows based upon maturity dates of our debt obligations and debt and
preferred equity investments and the weighted-average interest rates by expected maturity dates, including as-of-right extension
options, as of December 31, 2020 (in thousands):
Long-Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
Debt and Preferred
Equity Investments (1)
Amount
Weighted
Yield
$
360,700
3.62 % $
300,027
1.94 % $
216,162
6.05 %
1,006,552
806,599
278,034
100,829
580,969
3.59 %
3.95 %
4.26 %
4.34 %
4.35 %
57,650
1,170,000
200,000
—
100,000
1.97 %
1.93 %
1.57 %
2.09 %
2.82 %
398,053
10.33 %
245,092
1.74 %
6,890
30,000
180,345
— %
8.40 %
6.95 %
6.83 %
$
$
3,133,683
3.78 % $
1,827,677
1.93 % $
1,076,542
3,237,075
$
1,822,740
(1)
Our debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion at December 31, 2020.
The table below presents the principal cash flows based upon maturity dates of our share of our joint venture debt
obligations and the weighted-average interest rates by expected maturity dates as of December 31, 2020 (in thousands):
Long Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
$
11,415
4.15 % $
1,073,864
492,801
271,080
16,994
1,261,997
442,675
4.11 %
3.94 %
3.88 %
3.88 %
3.98 %
48,146
219,986
600,016
123,259
110,138
$
$
2,496,962
4.02 % $
2,175,409
2,570,780
$
2,164,526
2.13 %
2.19 %
2.57 %
2.85 %
3.34 %
3.68 %
2.43 %
2021
2022
2023
2024
2025
Thereafter
Total
Fair Value
2021
2022
2023
2024
2025
Thereafter
Total
Fair Value
66073_10K_r3.indd 22
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22
23
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
and the industry as a whole;
dependence upon certain geographic markets;
risks of real estate acquisitions, dispositions, development and redevelopment, including the cost of
construction delays and cost overruns;
risks relating to debt and preferred equity investments;
availability and creditworthiness of prospective tenants and borrowers;
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy,
and increasing availability of sublease space;
availability of capital (debt and equity);
unanticipated increases in financing and other costs, including a rise in interest rates;
our ability to comply with financial covenants in our debt instruments;
our ability to maintain our status as a REIT;
risks of investing through joint venture structures, including the fulfillment by our partners of their financial
obligations;
the threat of terrorist attacks;
our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of
our insurance coverage, including as a result of environmental contamination; and
legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business
including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other
similar laws and regulations.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this
report and in our other filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
the effect of the on-going COVID-19 pandemic and the duration of the impact it will have on our business
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Rate Risk" for
additional information regarding our exposure to interest rate fluctuations.
The table below presents the principal cash flows based upon maturity dates of our debt obligations and debt and
preferred equity investments and the weighted-average interest rates by expected maturity dates, including as-of-right extension
options, as of December 31, 2020 (in thousands):
Long-Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
Debt and Preferred
Equity Investments (1)
Amount
Weighted
Yield
$
360,700
3.62 % $
300,027
1.94 % $
216,162
6.05 %
1,006,552
806,599
278,034
100,829
580,969
3.59 %
3.95 %
4.26 %
4.34 %
4.35 %
57,650
1,170,000
200,000
—
100,000
1.97 %
1.93 %
1.57 %
2.09 %
2.82 %
398,053
10.33 %
245,092
1.74 %
6,890
30,000
180,345
— %
8.40 %
6.95 %
6.83 %
$
$
3,133,683
3.78 % $
1,827,677
1.93 % $
1,076,542
3,237,075
$
1,822,740
2021
2022
2023
2024
2025
Thereafter
Total
Fair Value
(1)
Our debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion at December 31, 2020.
The table below presents the principal cash flows based upon maturity dates of our share of our joint venture debt
obligations and the weighted-average interest rates by expected maturity dates as of December 31, 2020 (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
Fair Value
Long Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
$
11,415
4.15 % $
1,073,864
492,801
271,080
16,994
1,261,997
442,675
4.11 %
3.94 %
3.88 %
3.88 %
3.98 %
48,146
219,986
600,016
123,259
110,138
$
$
2,496,962
4.02 % $
2,175,409
2,570,780
$
2,164,526
2.13 %
2.19 %
2.57 %
2.85 %
3.34 %
3.68 %
2.43 %
22
23
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The table below lists our consolidated derivative instruments, which are hedging variable rate debt, and their related fair
values as of December 31, 2020 (in thousands):
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
LIBOR
200,000
1.131 %
Mortgage
Mortgage
Mortgage
Credit Facility
LIBOR
100,000
1.161 %
July 2016
July 2016
July 2023
July 2023
(5,004)
(2,578)
LIBOR
111,869
3.500 %
December 2020
November 2021
LIBOR
510,000
3.000 %
June 2020
December 2021
—
—
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Asset
Hedged
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
Mortgage
LIBOR
$ 85,000
4.000 %
March 2019
March 2021 $
—
Assets
Credit Facility
LIBOR
350,000
0.544 %
April 2020
August 2021
(771)
Commercial real estate properties, at cost:
Credit Facility
LIBOR
600,000
4.000 %
August 2020
September 2023
28
Credit Facility
LIBOR
150,000
2.696 %
January 2019
January 2024 (11,344)
Credit Facility
LIBOR
150,000
2.721 %
January 2019
January 2026 (17,714)
Less: accumulated depreciation
Credit Facility
LIBOR
200,000
2.740 %
January 2019
January 2026 (23,806)
Land and land interests
Building and improvements
Building leasehold and improvements
Right of use asset - financing leases
Right of use asset - operating leases
Assets held for sale
Cash and cash equivalents
Restricted cash
Investments in marketable securities
Tenant and other receivables
Related party receivables
Deferred rents receivable
Deferred costs, net
Other assets
Total assets (1)
Liabilities
Mortgages and other loans payable, net
Revolving credit facility, net
Unsecured term loans, net
Unsecured notes, net
Accrued interest payable
Other liabilities
Accounts payable and accrued expenses
Deferred revenue
Lease liability - financing leases
Lease liability - operating leases
Dividend and distributions payable
Security deposits
Liabilities related to assets held for sale
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
securities
Total liabilities (1)
Commitments and contingencies
Noncontrolling interests in Operating Partnership
Preferred units
December 31, 2020
December 31, 2019
$
1,315,832 $
4,168,193
1,448,134
55,711
367,209
7,355,079
(1,956,077)
5,399,002
—
266,059
106,736
28,570
44,507
34,657
302,791
1,076,542
3,823,322
177,168
448,213
1,979,972 $
105,262
1,495,275
1,248,219
14,825
302,798
151,309
118,572
152,521
339,458
149,294
53,836
—
100,000
6,211,341
358,262
202,169
1,751,544
5,154,990
1,433,793
47,445
396,795
8,784,567
(2,060,560)
6,724,007
391,664
166,070
75,360
29,887
43,968
21,121
283,011
1,580,306
2,912,842
205,283
332,801
2,183,253
234,013
1,494,024
1,496,847
22,148
177,080
166,905
114,052
44,448
381,671
79,282
62,252
—
100,000
6,555,975
409,862
283,285
11,707,567 $
12,766,320
$
$
Total Consolidated Hedges
$ (61,189)
In addition to these derivative instruments, some of our joint venture loan agreements require the joint venture to
purchase interest rate caps on its debt. All such interest rate caps represented an asset of $1.1 million in the aggregate at
December 31, 2020. We also swapped certain floating rate debt at some of our joint ventures. These swaps represented a
liability of $11.4 million in the aggregate at December 31, 2020.
Debt and preferred equity investments, net of discounts and deferred origination fees of
$11,232 and $14,562 and allowances of $13,213 and $1,750 in 2020 and 2019, respectively
Investments in unconsolidated joint ventures
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24
25
Total Consolidated Hedges
$ (61,189)
Credit Facility
LIBOR
200,000
2.740 %
January 2019
January 2026 (23,806)
In addition to these derivative instruments, some of our joint venture loan agreements require the joint venture to
purchase interest rate caps on its debt. All such interest rate caps represented an asset of $1.1 million in the aggregate at
December 31, 2020. We also swapped certain floating rate debt at some of our joint ventures. These swaps represented a
liability of $11.4 million in the aggregate at December 31, 2020.
The table below lists our consolidated derivative instruments, which are hedging variable rate debt, and their related fair
values as of December 31, 2020 (in thousands):
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Asset
Hedged
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
Mortgage
LIBOR
$ 85,000
4.000 %
March 2019
March 2021 $
—
Assets
Credit Facility
LIBOR
350,000
0.544 %
April 2020
August 2021
(771)
Commercial real estate properties, at cost:
Mortgage
Mortgage
Mortgage
LIBOR
111,869
3.500 %
December 2020
November 2021
LIBOR
510,000
3.000 %
June 2020
December 2021
—
—
LIBOR
200,000
1.131 %
Credit Facility
LIBOR
100,000
1.161 %
July 2016
July 2016
July 2023
July 2023
(5,004)
(2,578)
Credit Facility
LIBOR
600,000
4.000 %
August 2020
September 2023
28
Credit Facility
LIBOR
150,000
2.696 %
January 2019
January 2024 (11,344)
Land and land interests
Building and improvements
Building leasehold and improvements
Right of use asset - financing leases
Right of use asset - operating leases
Credit Facility
LIBOR
150,000
2.721 %
January 2019
January 2026 (17,714)
Less: accumulated depreciation
Assets held for sale
Cash and cash equivalents
Restricted cash
Investments in marketable securities
Tenant and other receivables
Related party receivables
Deferred rents receivable
Debt and preferred equity investments, net of discounts and deferred origination fees of
$11,232 and $14,562 and allowances of $13,213 and $1,750 in 2020 and 2019, respectively
Investments in unconsolidated joint ventures
Deferred costs, net
Other assets
Total assets (1)
Liabilities
Mortgages and other loans payable, net
Revolving credit facility, net
Unsecured term loans, net
Unsecured notes, net
Accrued interest payable
Other liabilities
Accounts payable and accrued expenses
Deferred revenue
Lease liability - financing leases
Lease liability - operating leases
Dividend and distributions payable
Security deposits
Liabilities related to assets held for sale
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
securities
Total liabilities (1)
Commitments and contingencies
Noncontrolling interests in Operating Partnership
Preferred units
December 31, 2020
December 31, 2019
$
1,315,832 $
4,168,193
1,448,134
55,711
367,209
7,355,079
(1,956,077)
5,399,002
—
266,059
106,736
28,570
44,507
34,657
302,791
1,751,544
5,154,990
1,433,793
47,445
396,795
8,784,567
(2,060,560)
6,724,007
391,664
166,070
75,360
29,887
43,968
21,121
283,011
$
$
1,076,542
1,580,306
3,823,322
177,168
448,213
2,912,842
205,283
332,801
11,707,567 $
12,766,320
1,979,972 $
105,262
1,495,275
1,248,219
14,825
302,798
151,309
118,572
152,521
339,458
149,294
53,836
—
100,000
6,211,341
358,262
202,169
2,183,253
234,013
1,494,024
1,496,847
22,148
177,080
166,905
114,052
44,448
381,671
79,282
62,252
—
100,000
6,555,975
409,862
283,285
24
25
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SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
SL Green Realty Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
Equity
SL Green stockholders' equity:
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and
outstanding at both December 31, 2020 and 2019
Common stock, $0.01 par value, 160,000 shares authorized and 69,534 and 77,981 issued
and outstanding at December 31, 2020 and 2019, respectively (including 1,026 and 1,026
shares held in treasury at December 31, 2020 and 2019, respectively)
Additional paid-in-capital
Treasury stock at cost
Accumulated other comprehensive loss
Retained earnings
Total SL Green stockholders' equity
Noncontrolling interests in other partnerships
Total equity
Total liabilities and equity
December 31, 2020
December 31, 2019
221,932
221,932
716
3,862,949
(124,049)
(67,247)
1,015,462
4,909,763
26,032
4,935,795
$
11,707,567 $
803
4,286,395
(124,049)
(28,485)
1,084,719
5,441,315
75,883
5,517,198
12,766,320
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated
balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $41.2 million and $205.2 million of land,
$57.9 million and $481.9 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $37.8 million and
$61.7 million of right of use assets, $10.3 million and $17.6 million of accumulated depreciation, $289.5 million and $169.5 million of other assets included
in other line items, $94.0 million and $457.1 million of real estate debt, net, $0.7 million and $1.2 million of accrued interest payable, $29.9 million and $57.7
million of lease liabilities, and $56.6 million and $43.7 million of other liabilities included in other line items as of December 31, 2020 and December 31,
2019, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
Operating expenses, including $12,643 in 2020, $18,106 in 2019, $17,823 in
183,200
234,676
229,347
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
2018 of related party expenses
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Transaction related costs
Marketing, general and administrative
Total expenses
Loan loss and other investment reserves, net of recoveries
Equity in net (loss) income from unconsolidated joint ventures
Equity in net gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain (loss) on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Net income attributable to noncontrolling interests:
Noncontrolling interests in the Operating Partnership
Noncontrolling interests in other partnerships
Preferred units distributions
Net income attributable to SL Green
Perpetual preferred stock dividends
Basic earnings per share:
Diluted earnings per share:
Year Ended December 31,
2020
2019
2018
$
804,423 $
983,557 $
120,163
128,158
195,590
59,848
978,574
201,492
47,326
1,052,744
1,238,995
1,227,392
176,315
29,043
116,679
11,794
313,668
35,298
503
91,826
958,326
(25,195)
2,961
187,522
215,506
(60,454)
—
414,758
(20,016)
(14,940)
(8,747)
371,055
(14,950)
190,764
33,188
190,521
11,653
272,358
—
729
100,875
1,034,764
(34,518)
76,181
69,389
(16,749)
(7,047)
—
291,487
(13,301)
3,159
(10,911)
270,434
(14,950)
186,351
32,965
208,669
12,408
279,507
6,839
1,099
92,631
1,049,816
7,311
303,967
57,385
(30,757)
(227,543)
(17,083)
270,856
(12,216)
6
(11,384)
247,262
(14,950)
232,312
2.75
2.75
84,090
89,071
Net income attributable to SL Green common stockholders
356,105 $
255,484 $
$
$
$
4.88 $
4.87 $
3.20 $
3.19 $
Basic weighted average common shares outstanding
Diluted weighted average common shares and common share equivalents
outstanding
72,552
77,243
79,415
84,234
The accompanying notes are an integral part of these consolidated financial statements.
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26
27
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
SL Green Realty Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
Equity
SL Green stockholders' equity:
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and
outstanding at both December 31, 2020 and 2019
Common stock, $0.01 par value, 160,000 shares authorized and 69,534 and 77,981 issued
and outstanding at December 31, 2020 and 2019, respectively (including 1,026 and 1,026
shares held in treasury at December 31, 2020 and 2019, respectively)
Additional paid-in-capital
Treasury stock at cost
Accumulated other comprehensive loss
Retained earnings
Total SL Green stockholders' equity
Noncontrolling interests in other partnerships
Total equity
Total liabilities and equity
December 31, 2020
December 31, 2019
221,932
221,932
716
3,862,949
(124,049)
(67,247)
1,015,462
4,909,763
26,032
4,935,795
803
4,286,395
(124,049)
(28,485)
1,084,719
5,441,315
75,883
5,517,198
12,766,320
$
11,707,567 $
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated
balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $41.2 million and $205.2 million of land,
$57.9 million and $481.9 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $37.8 million and
$61.7 million of right of use assets, $10.3 million and $17.6 million of accumulated depreciation, $289.5 million and $169.5 million of other assets included
in other line items, $94.0 million and $457.1 million of real estate debt, net, $0.7 million and $1.2 million of accrued interest payable, $29.9 million and $57.7
million of lease liabilities, and $56.6 million and $43.7 million of other liabilities included in other line items as of December 31, 2020 and December 31,
2019, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Year Ended December 31,
2020
2019
2018
$
804,423 $
983,557 $
120,163
128,158
195,590
59,848
978,574
201,492
47,326
1,052,744
1,238,995
1,227,392
Operating expenses, including $12,643 in 2020, $18,106 in 2019, $17,823 in
2018 of related party expenses
183,200
234,676
229,347
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Loan loss and other investment reserves, net of recoveries
Transaction related costs
Marketing, general and administrative
Total expenses
Equity in net (loss) income from unconsolidated joint ventures
Equity in net gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain (loss) on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Net income attributable to noncontrolling interests:
Noncontrolling interests in the Operating Partnership
Noncontrolling interests in other partnerships
Preferred units distributions
Net income attributable to SL Green
Perpetual preferred stock dividends
Net income attributable to SL Green common stockholders
Basic earnings per share:
Diluted earnings per share:
176,315
29,043
116,679
11,794
313,668
35,298
503
91,826
958,326
(25,195)
2,961
187,522
215,506
(60,454)
—
414,758
(20,016)
(14,940)
(8,747)
371,055
(14,950)
190,764
33,188
190,521
11,653
272,358
—
729
100,875
1,034,764
(34,518)
76,181
69,389
(16,749)
(7,047)
—
291,487
(13,301)
3,159
(10,911)
270,434
(14,950)
$
$
$
356,105 $
255,484 $
4.88 $
4.87 $
3.20 $
3.19 $
Basic weighted average common shares outstanding
Diluted weighted average common shares and common share equivalents
outstanding
72,552
77,243
79,415
84,234
186,351
32,965
208,669
12,408
279,507
6,839
1,099
92,631
1,049,816
7,311
303,967
57,385
(30,757)
(227,543)
(17,083)
270,856
(12,216)
6
(11,384)
247,262
(14,950)
232,312
2.75
2.75
84,090
89,071
The accompanying notes are an integral part of these consolidated financial statements.
26
27
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SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
Net income
Other comprehensive loss:
Decrease in unrealized value of derivative instruments, including SL Green's
share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Other comprehensive loss
Comprehensive income
Net income attributable to noncontrolling interests and preferred units
distributions
Other comprehensive loss attributable to noncontrolling interests
Year Ended December 31,
2019
2018
2020
$
414,758 $
291,487 $
270,856
(39,743)
(1,318)
(41,061)
373,697
(43,703)
2,299
(47,118)
1,249
(45,869)
245,618
(21,053)
2,276
(3,622)
60
(3,562)
267,294
(23,594)
66
Comprehensive income attributable to SL Green
$
332,293 $
226,841 $
243,766
The accompanying notes are an integral part of these consolidated financial statements.
SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
1
136
155
2
16,301
(9,469)
(98)
(522,482)
145
307
1
3
17,483
28,909
Balance at December 31, 2017
$ 221,932
90,172
$ 939
$ 4,968,338
$ (124,049) $
18,604
$ 1,139,329
$
364,361
$ 6,589,454
Series I
Preferred
Stock
Shares
(1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Balance at January 1, 2018
221,932
90,172
939
4,968,338
(124,049)
18,604
1,709,853
364,361
7,159,978
Cumulative adjustment upon adoption of ASC
610-20
Net income (loss)
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Proceeds from stock options exercised
Contributions to consolidated joint venture
interests
Deconsolidation of partially owned entity
Distributions to noncontrolling interests
Cash distributions declared ($3.3834 per common
share, none of which represented a return of
capital for federal income tax purposes)
Net income (loss)
Acquisition of subsidiary interest from
noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Contributions to consolidated joint venture
interests
Distributions to noncontrolling interests
Cash distributions declared ($3.5352 per common
share, none of which represented a return of
capital for federal income tax purposes)
Cumulative adjustment upon adoption of ASC
326
Net income
Acquisition of subsidiary interest from
noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
570,524
570,524
247,262
(6)
247,256
(3,496)
(14,950)
34,236
(415,215)
5,459
5,459
(315,116)
(315,116)
(8,364)
(8,364)
(282,188)
(282,188)
270,434
(3,159)
267,275
(25,276)
(25,845)
(3,496)
(14,950)
136
16,303
34,236
17,484
(937,795)
28,912
(43,593)
(14,950)
334
471
(34,320)
25,763
(384,399)
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
Balance at December 31, 2018
221,932
81,311
847
4,508,685
(124,049)
15,108
1,278,998
46,334
5,947,855
(569)
334
471
4
5
102
2
25,761
(4,466)
(46)
(248,287)
(43,593)
(14,950)
(34,320)
(136,066)
Balance at December 31, 2019
221,932
76,956
803
4,286,395
(124,049)
(28,485)
1,084,719
75,883
5,517,198
Balance at January 1, 2020
221,932
76,956
803
4,286,395
(124,049)
(28,485)
1,045,535
75,883
5,478,014
58,462
58,462
(478)
(478)
(279,377)
(279,377)
(39,184)
(39,184)
371,055
14,940
385,995
(3,123)
1,006
17
98
1
8,743
1,587
(38,762)
(14,950)
32,598
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28
29
SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
Net income
Other comprehensive loss:
Other comprehensive loss
Comprehensive income
Decrease in unrealized value of derivative instruments, including SL Green's
share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Net income attributable to noncontrolling interests and preferred units
distributions
Other comprehensive loss attributable to noncontrolling interests
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
(39,743)
(1,318)
(41,061)
373,697
(43,703)
2,299
(47,118)
1,249
(45,869)
245,618
(21,053)
2,276
(3,622)
60
(3,562)
267,294
(23,594)
66
Comprehensive income attributable to SL Green
$
332,293 $
226,841 $
243,766
The accompanying notes are an integral part of these consolidated financial statements.
SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
Series I
Preferred
Stock
Shares
(1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Balance at December 31, 2017
$ 221,932
90,172
$ 939
$ 4,968,338
$ (124,049) $
18,604
$ 1,139,329
$
364,361
$ 6,589,454
Cumulative adjustment upon adoption of ASC
610-20
570,524
570,524
Balance at January 1, 2018
221,932
90,172
939
4,968,338
(124,049)
18,604
1,709,853
364,361
7,159,978
Net income (loss)
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Proceeds from stock options exercised
Contributions to consolidated joint venture
interests
Deconsolidation of partially owned entity
Distributions to noncontrolling interests
Cash distributions declared ($3.3834 per common
share, none of which represented a return of
capital for federal income tax purposes)
1
136
155
2
16,301
145
1
17,483
(9,469)
(98)
(522,482)
307
3
28,909
247,262
(6)
247,256
(3,496)
(14,950)
34,236
(415,215)
(3,496)
(14,950)
136
16,303
34,236
17,484
(937,795)
28,912
5,459
5,459
(315,116)
(315,116)
(8,364)
(8,364)
(282,188)
(282,188)
Balance at December 31, 2018
221,932
81,311
847
4,508,685
(124,049)
15,108
1,278,998
46,334
5,947,855
Net income (loss)
Acquisition of subsidiary interest from
noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Contributions to consolidated joint venture
interests
Distributions to noncontrolling interests
Cash distributions declared ($3.5352 per common
share, none of which represented a return of
capital for federal income tax purposes)
(569)
334
471
4
5
102
2
25,761
(4,466)
(46)
(248,287)
270,434
(3,159)
267,275
(25,276)
(25,845)
(43,593)
(14,950)
(34,320)
(136,066)
(43,593)
(14,950)
334
471
(34,320)
25,763
(384,399)
58,462
58,462
(478)
(478)
(279,377)
(279,377)
Balance at December 31, 2019
221,932
76,956
803
4,286,395
(124,049)
(28,485)
1,084,719
75,883
5,517,198
Cumulative adjustment upon adoption of ASC
326
(39,184)
(39,184)
Balance at January 1, 2020
221,932
76,956
803
4,286,395
(124,049)
(28,485)
1,045,535
75,883
5,478,014
Net income
Acquisition of subsidiary interest from
noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership to
common stock
Reallocation of noncontrolling interest in the
Operating Partnership
(3,123)
1,006
1
8,743
17
98
371,055
14,940
385,995
1,587
(38,762)
(14,950)
32,598
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
28
29
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SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
Series I
Preferred
Stock
Shares
(1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Contributions to consolidated joint venture
interests
Distributions to noncontrolling interests
Cash distributions declared ($4.7908 per common
share, none of which represented a return of
capital for federal income tax purposes)
(34)
—
25,271
(8,529)
(88)
(455,343)
(76,831)
25,271
(532,262)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
Balance at December 31, 2020
$ 221,932
68,508
$ 716
$ 3,862,949
$ (124,049) $
(67,247) $ 1,015,462
$
26,032
$ 4,935,795
(1)
On January 21, 2021, we completed a reverse stock split whereby every 1.02918 SL Green common share was combined into 1 SL Green common
share. We have retroactively adjusted the outstanding share counts, share activity, cash distributions declared, and earnings per share, as if the reverse
split occurred on December 31, 2017.
The accompanying notes are an integral part of these consolidated financial statements.
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss (income) from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Purchase price and other fair value adjustments
Depreciable real estate reserves and impairments
(Gain) loss on sale of real estate, net
Loan loss reserves and other investment reserves, net of recoveries
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate
(2,961)
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
325,462
25,195
679
(187,522)
60,454
(215,506)
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
284,011
34,518
864
(76,181)
(69,389)
7,047
16,749
—
—
(13,941)
13,744
271
(4,968)
7,802
(70,938)
(18,630)
(25,597)
10,824
(11,200)
376,473
289,899
(7,311)
10,277
(303,967)
(57,385)
227,543
30,757
6,839
17,083
(18,216)
2,016
2,932
6,968
(1,044)
(44,158)
(8,310)
4,410
12,348
—
441,537
$
(86,846) $
(262,591) $
(60,486)
(458,140)
(252,986)
(254,460)
—
(5,239)
—
(70,315)
124,572
1,112,382
32,479
(128,682)
(400,429)
79,020
208,302
233,118
1,231,004
(7,869)
(38,912)
(360,953)
(607,844)
(731,216)
763,251
1,092,383
1,056,430
114,494
703,043
681,662
Loss on early extinguishment of debt
Deferred rents receivable
Non-cash lease expense
Other non-cash adjustments
Changes in operating assets and liabilities:
Tenant and other receivables
Related party receivables
Deferred lease costs
Other assets
Deferred revenue
Change in lease liability - operating leases
Net cash provided by operating activities
Investing Activities
Acquisitions of real estate property
Additions to land, buildings and improvements
Acquisition deposits and deferred purchase price
Investments in unconsolidated joint ventures
Accounts payable, accrued expenses, other liabilities and security deposits
Distributions in excess of cumulative earnings from unconsolidated joint ventures
Net proceeds from disposition of real estate/joint venture interest
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
66073_10K_r3.indd 30
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30
31
SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
(34)
—
25,271
(8,529)
(88)
(455,343)
Deferred compensation plan and stock awards, net
of forfeitures and tax withholdings
Repurchases of common stock
Contributions to consolidated joint venture
interests
Distributions to noncontrolling interests
Cash distributions declared ($4.7908 per common
share, none of which represented a return of
capital for federal income tax purposes)
(76,831)
25,271
(532,262)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
Balance at December 31, 2020
$ 221,932
68,508
$ 716
$ 3,862,949
$ (124,049) $
(67,247) $ 1,015,462
$
26,032
$ 4,935,795
(1)
On January 21, 2021, we completed a reverse stock split whereby every 1.02918 SL Green common share was combined into 1 SL Green common
share. We have retroactively adjusted the outstanding share counts, share activity, cash distributions declared, and earnings per share, as if the reverse
split occurred on December 31, 2017.
The accompanying notes are an integral part of these consolidated financial statements.
Series I
Preferred
Stock
Shares
(1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Operating Activities
Net income
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss (income) from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
325,462
25,195
679
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate
(2,961)
Purchase price and other fair value adjustments
Depreciable real estate reserves and impairments
(Gain) loss on sale of real estate, net
Loan loss reserves and other investment reserves, net of recoveries
Loss on early extinguishment of debt
Deferred rents receivable
Non-cash lease expense
Other non-cash adjustments
Changes in operating assets and liabilities:
Tenant and other receivables
Related party receivables
Deferred lease costs
Other assets
Accounts payable, accrued expenses, other liabilities and security deposits
Deferred revenue
Change in lease liability - operating leases
Net cash provided by operating activities
Investing Activities
Acquisitions of real estate property
Additions to land, buildings and improvements
Acquisition deposits and deferred purchase price
Investments in unconsolidated joint ventures
Distributions in excess of cumulative earnings from unconsolidated joint ventures
Net proceeds from disposition of real estate/joint venture interest
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
284,011
34,518
864
(76,181)
(69,389)
7,047
16,749
—
—
(13,941)
13,744
271
(4,968)
7,802
(70,938)
(18,630)
(25,597)
10,824
(11,200)
376,473
289,899
(7,311)
10,277
(303,967)
(57,385)
227,543
30,757
6,839
17,083
(18,216)
2,016
2,932
6,968
(1,044)
(44,158)
(8,310)
4,410
12,348
—
441,537
(187,522)
60,454
(215,506)
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
$
(86,846) $
(262,591) $
(60,486)
(458,140)
(252,986)
(254,460)
—
(5,239)
—
(70,315)
124,572
1,112,382
32,479
(128,682)
(400,429)
79,020
208,302
233,118
1,231,004
(7,869)
(38,912)
(360,953)
(607,844)
(731,216)
763,251
1,092,383
1,056,430
114,494
703,043
681,662
30
31
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SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2020
2019
2018
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
$
1,181,892 $
752,984 $
564,391
Distributions to noncontrolling interests
(1,186,828)
(230,076)
(868,842)
Share repurchase payable
Contribution to consolidated joint venture by noncontrolling interest
Proceeds from revolving credit facility and senior unsecured notes
1,495,000
1,310,000
3,120,000
Recognition of sales-type leases and related lease liabilities
Repayments of revolving credit facility and senior unsecured notes
(1,875,000)
(1,570,000)
(2,560,000)
Recognition of right of use assets and related lease liabilities
Payment of debt extinguishment costs
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common stock
Redemption of preferred stock
Redemption of OP units
Distributions to noncontrolling interests in other partnerships
Contributions from noncontrolling interests in other partnerships
Acquisition of subsidiary interest from noncontrolling interest
Distributions to noncontrolling interests in the Operating Partnership
Dividends paid on common and preferred stock
Other obligations related to loan participations
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
—
1,006
—
334
(13,918)
29,048
(528,483)
(384,399)
(979,541)
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(12,652)
(18,142)
(27,495)
(478)
10,239
(25,845)
(14,729)
(1,208)
(33,972)
(8,364)
5,459
—
(15,000)
(293,996)
(306,386)
(313,230)
—
(4,752)
(70,036)
(833)
—
(3,495)
(21,162)
—
16
(3,842)
(15,109)
—
(1,479,301)
(528,650)
(1,094,112)
131,365
241,430
(37,683)
279,113
29,087
250,026
Cash, cash equivalents, and restricted cash at end of period
$
372,795 $
241,430 $
279,113
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2020
2019
2018
—
6,613
3,779
119,725
61,990
48,223
—
—
—
389,120
—
—
—
—
—
In December 2020, the Company declared a regular monthly distribution per share of $0.3122 and a special distribution
per share of $1.7462 that was paid primarily in stock. These distributions were paid in January 2021. In December 2019 and
2018, the Company declared quarterly distributions per share of $0.9108 and $0.8748, respectively. These distributions were
paid in January 2020 and 2019, respectively. These distribution amounts have been retroactively adjusted to reflect the reverse
stock split that was effectuated in January 2021.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the
consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended
2020
2019
2018
$
$
266,059 $
166,070 $
129,475
106,736
75,360
149,638
372,795 $
241,430 $
279,113
$
$
$
Supplemental cash flow disclosures:
Interest paid
Income taxes paid
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
Redemption of units in the Operating Partnership for a joint venture sale
Exchange of preferred equity investment for real estate or equity in joint venture
Exchange of debt investment for real estate or equity in joint venture
Issuance of preferred units relating to a real estate acquisition
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Deconsolidation of a subsidiary
Deconsolidation of a subsidiary mortgage
Mortgages assumed in connection with sale of real estate
Seller financed purchases
Debt and preferred equity investments
Transfer of assets related to assets held for sale
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Removal of fully depreciated commercial real estate properties
201,348 $
248,684 $
259,776
2,296 $
1,489 $
1,418
8,744 $
471 $
—
119,497
122,796
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
391,664
—
66,169
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
391,664
—
—
16,303
10,445
—
298,956
—
—
34,236
298,404
—
—
—
—
—
—
—
19,577
124,249
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32
33
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2020
2019
2018
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
$
1,181,892 $
752,984 $
564,391
Distributions to noncontrolling interests
(1,186,828)
(230,076)
(868,842)
Share repurchase payable
Contribution to consolidated joint venture by noncontrolling interest
Proceeds from revolving credit facility and senior unsecured notes
1,495,000
1,310,000
3,120,000
Recognition of sales-type leases and related lease liabilities
Repayments of revolving credit facility and senior unsecured notes
(1,875,000)
(1,570,000)
(2,560,000)
Recognition of right of use assets and related lease liabilities
Year Ended December 31,
2020
2019
2018
—
6,613
3,779
119,725
61,990
48,223
—
—
—
389,120
—
—
—
—
—
In December 2020, the Company declared a regular monthly distribution per share of $0.3122 and a special distribution
per share of $1.7462 that was paid primarily in stock. These distributions were paid in January 2021. In December 2019 and
2018, the Company declared quarterly distributions per share of $0.9108 and $0.8748, respectively. These distributions were
paid in January 2020 and 2019, respectively. These distribution amounts have been retroactively adjusted to reflect the reverse
stock split that was effectuated in January 2021.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the
consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash
Year Ended
2020
2019
2018
$
$
266,059 $
166,070 $
129,475
106,736
75,360
149,638
372,795 $
241,430 $
279,113
The accompanying notes are an integral part of these consolidated financial statements.
Cash, cash equivalents, and restricted cash at end of period
$
372,795 $
241,430 $
279,113
Payment of debt extinguishment costs
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common stock
Redemption of preferred stock
Redemption of OP units
Distributions to noncontrolling interests in other partnerships
Contributions from noncontrolling interests in other partnerships
Acquisition of subsidiary interest from noncontrolling interest
Distributions to noncontrolling interests in the Operating Partnership
Dividends paid on common and preferred stock
Other obligations related to loan participations
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
Supplemental cash flow disclosures:
Interest paid
Income taxes paid
Redemption of units in the Operating Partnership for a joint venture sale
Exchange of preferred equity investment for real estate or equity in joint venture
Exchange of debt investment for real estate or equity in joint venture
Issuance of preferred units relating to a real estate acquisition
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Deconsolidation of a subsidiary
Deconsolidation of a subsidiary mortgage
Mortgages assumed in connection with sale of real estate
Seller financed purchases
Debt and preferred equity investments
Transfer of assets related to assets held for sale
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
(528,483)
(384,399)
(979,541)
—
1,006
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(12,652)
—
(4,752)
(70,036)
(833)
—
334
(18,142)
(27,495)
(478)
10,239
(25,845)
(14,729)
—
(3,495)
(21,162)
—
(13,918)
29,048
(1,208)
(33,972)
(8,364)
5,459
—
(15,000)
16
(3,842)
(15,109)
—
(293,996)
(306,386)
(313,230)
(1,479,301)
(528,650)
(1,094,112)
131,365
241,430
(37,683)
279,113
29,087
250,026
201,348 $
248,684 $
259,776
2,296 $
1,489 $
1,418
$
$
$
—
119,497
122,796
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
391,664
—
—
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
—
—
391,664
16,303
10,445
298,956
34,236
298,404
—
—
—
—
—
—
—
—
—
—
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
8,744 $
471 $
Removal of fully depreciated commercial real estate properties
66,169
19,577
124,249
32
33
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SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Capital
SLGOP partners' capital:
December 31, 2020 and 2019
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both
SL Green partners' capital (724 and 812 general partner common units, and 67,784 and
76,145 limited partner common units outstanding at December 31, 2020 and 2019,
respectively)
Accumulated other comprehensive loss
Total SLGOP partners' capital
Noncontrolling interests in other partnerships
Total capital
Total liabilities and capital
221,932
221,932
4,755,078
(67,247)
4,909,763
26,032
4,935,795
5,247,868
(28,485)
5,441,315
75,883
5,517,198
12,766,320
$
11,707,567 $
(1) The Operating Partnership's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The
consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $41.2 million and $205.2
million of land, $57.9 million and $481.9 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $37.8
million and $61.7 million of right of use assets, $10.3 million and $17.6 million of accumulated depreciation, $289.5 million and $169.5 million of other
assets included in other line items, $94.0 million and $457.1 million of real estate debt, net, $0.7 million and $1.2 million of accrued interest payable, $29.9
million and $57.7 million of lease liabilities, and $56.6 million and $43.7 million of other liabilities included in other line items as of December 31, 2020 and
December 31, 2019, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
Assets
Commercial real estate properties, at cost:
Land and land interests
Building and improvements
Building leasehold and improvements
Right of use asset - financing leases
Right of use asset - operating leases
Less: accumulated depreciation
Assets held for sale
Cash and cash equivalents
Restricted cash
Investments in marketable securities
Tenant and other receivables
Related party receivables
Deferred rents receivable
Debt and preferred equity investments, net of discounts and deferred origination fees of
$11,232 and $14,562 and allowances of $13,213 and $1,750 in 2020 and 2019, respectively
Investments in unconsolidated joint ventures
Deferred costs, net
Other assets
Total assets (1)
Liabilities
Mortgages and other loans payable, net
Revolving credit facility, net
Unsecured term loans, net
Unsecured notes, net
Accrued interest payable
Other liabilities
Accounts payable and accrued expenses
Deferred revenue
Lease liability - financing leases
Lease liability - operating leases
Dividend and distributions payable
Security deposits
Liabilities related to assets held for sale
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
securities
Total liabilities (1)
Commitments and contingencies
Limited partner interests in SLGOP (3,939 and 4,196 limited partner common units
outstanding at December 31, 2020 and 2019, respectively)
Preferred units
$
1,315,832 $
4,168,193
1,448,134
55,711
367,209
7,355,079
(1,956,077)
5,399,002
—
266,059
106,736
28,570
44,507
34,657
302,791
1,076,542
3,823,322
177,168
448,213
1,751,544
5,154,990
1,433,793
47,445
396,795
8,784,567
(2,060,560)
6,724,007
391,664
166,070
75,360
29,887
43,968
21,121
283,011
1,580,306
2,912,842
205,283
332,801
$
$
11,707,567 $
12,766,320
1,979,972 $
105,262
1,495,275
1,248,219
14,825
302,798
151,309
118,572
152,521
339,458
149,294
53,836
—
100,000
6,211,341
358,262
202,169
2,183,253
234,013
1,494,024
1,496,847
22,148
177,080
166,905
114,052
44,448
381,671
79,282
62,252
—
100,000
6,555,975
409,862
283,285
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34
35
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Capital
SLGOP partners' capital:
$
1,315,832 $
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both
December 31, 2020 and 2019
221,932
221,932
SL Green partners' capital (724 and 812 general partner common units, and 67,784 and
76,145 limited partner common units outstanding at December 31, 2020 and 2019,
respectively)
Accumulated other comprehensive loss
Total SLGOP partners' capital
Noncontrolling interests in other partnerships
Total capital
Total liabilities and capital
4,755,078
(67,247)
4,909,763
26,032
4,935,795
$
11,707,567 $
5,247,868
(28,485)
5,441,315
75,883
5,517,198
12,766,320
(1) The Operating Partnership's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The
consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $41.2 million and $205.2
million of land, $57.9 million and $481.9 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $37.8
million and $61.7 million of right of use assets, $10.3 million and $17.6 million of accumulated depreciation, $289.5 million and $169.5 million of other
assets included in other line items, $94.0 million and $457.1 million of real estate debt, net, $0.7 million and $1.2 million of accrued interest payable, $29.9
million and $57.7 million of lease liabilities, and $56.6 million and $43.7 million of other liabilities included in other line items as of December 31, 2020 and
December 31, 2019, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
Assets
Commercial real estate properties, at cost:
Land and land interests
Building and improvements
Building leasehold and improvements
Right of use asset - financing leases
Right of use asset - operating leases
Less: accumulated depreciation
Assets held for sale
Cash and cash equivalents
Restricted cash
Investments in marketable securities
Tenant and other receivables
Related party receivables
Deferred rents receivable
Deferred costs, net
Other assets
Total assets (1)
Liabilities
Mortgages and other loans payable, net
Revolving credit facility, net
Unsecured term loans, net
Unsecured notes, net
Accrued interest payable
Other liabilities
Accounts payable and accrued expenses
Deferred revenue
Lease liability - financing leases
Lease liability - operating leases
Dividend and distributions payable
Security deposits
Liabilities related to assets held for sale
securities
Total liabilities (1)
Commitments and contingencies
Debt and preferred equity investments, net of discounts and deferred origination fees of
$11,232 and $14,562 and allowances of $13,213 and $1,750 in 2020 and 2019, respectively
Investments in unconsolidated joint ventures
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
Limited partner interests in SLGOP (3,939 and 4,196 limited partner common units
outstanding at December 31, 2020 and 2019, respectively)
Preferred units
4,168,193
1,448,134
55,711
367,209
7,355,079
(1,956,077)
5,399,002
—
266,059
106,736
28,570
44,507
34,657
302,791
1,076,542
3,823,322
177,168
448,213
1,979,972 $
105,262
1,495,275
1,248,219
14,825
302,798
151,309
118,572
152,521
339,458
149,294
53,836
—
100,000
6,211,341
358,262
202,169
1,751,544
5,154,990
1,433,793
47,445
396,795
8,784,567
(2,060,560)
6,724,007
391,664
166,070
75,360
29,887
43,968
21,121
283,011
1,580,306
2,912,842
205,283
332,801
2,183,253
234,013
1,494,024
1,496,847
22,148
177,080
166,905
114,052
44,448
381,671
79,282
62,252
—
100,000
6,555,975
409,862
283,285
11,707,567 $
12,766,320
$
$
34
35
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SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
Net income
Other comprehensive loss:
(Decrease) increase in unrealized value of derivative instruments, including
SLGOP's share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Other comprehensive loss
Comprehensive income
Net loss attributable to noncontrolling interests
Other comprehensive loss attributable to noncontrolling interests
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
(39,743)
(1,318)
(41,061)
373,697
(14,940)
2,299
(47,118)
1,249
(45,869)
245,618
3,159
2,276
(3,622)
60
(3,562)
267,294
6
66
Comprehensive income attributable to SLGOP
$
361,056 $
251,053 $
267,366
The accompanying notes are an integral part of these consolidated financial statements.
SL Green Operating Partnership, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
Year Ended December 31,
2020
2019
2018
$
804,423 $
983,557 $
120,163
128,158
195,590
59,848
978,574
201,492
47,326
1,052,744
1,238,995
1,227,392
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Operating expenses, including $12,643 in 2020, $18,106 in 2019, $17,823 in
2018 of related party expenses
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Loan loss and other investment reserves, net of recoveries
Transaction related costs
Marketing, general and administrative
Total expenses
Equity in net (loss) income from unconsolidated joint ventures
Equity in net gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain (loss) on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Net loss attributable to noncontrolling interests in other partnerships
Preferred unit distributions
Net income attributable to SLGOP
Perpetual preferred stock dividends
Net income attributable to SLGOP common unitholders
Basic earnings per unit:
Diluted earnings per unit:
183,200
176,315
29,043
116,679
11,794
313,668
35,298
503
91,826
958,326
(25,195)
2,961
187,522
215,506
(60,454)
—
414,758
(14,940)
(8,747)
391,071
(14,950)
234,676
190,764
33,188
190,521
11,653
272,358
—
729
100,875
1,034,764
(34,518)
76,181
69,389
(16,749)
(7,047)
—
291,487
3,159
(10,911)
283,735
(14,950)
$
$
$
376,121 $
268,785 $
4.88 $
4.87 $
3.19 $
3.19 $
Basic weighted average common units outstanding
Diluted weighted average common units and common unit equivalents
outstanding
76,647
77,243
83,690
84,234
229,347
186,351
32,965
208,669
12,408
279,507
6,839
1,099
92,631
1,049,816
7,311
303,967
57,385
(30,757)
(227,543)
(17,083)
270,856
6
(11,384)
259,478
(14,950)
244,528
2.75
2.75
88,652
89,071
The accompanying notes are an integral part of these consolidated financial statements.
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37
SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
Net income
Other comprehensive loss:
(Decrease) increase in unrealized value of derivative instruments, including
SLGOP's share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Other comprehensive loss
Comprehensive income
Net loss attributable to noncontrolling interests
Other comprehensive loss attributable to noncontrolling interests
Year Ended December 31,
2019
2018
2020
$
414,758 $
291,487 $
270,856
(39,743)
(1,318)
(41,061)
373,697
(14,940)
2,299
(47,118)
1,249
(45,869)
245,618
3,159
2,276
(3,622)
60
(3,562)
267,294
6
66
Comprehensive income attributable to SLGOP
$
361,056 $
251,053 $
267,366
The accompanying notes are an integral part of these consolidated financial statements.
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Operating expenses, including $12,643 in 2020, $18,106 in 2019, $17,823 in
2018 of related party expenses
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Transaction related costs
Marketing, general and administrative
Total expenses
Loan loss and other investment reserves, net of recoveries
Equity in net (loss) income from unconsolidated joint ventures
Equity in net gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain (loss) on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Net loss attributable to noncontrolling interests in other partnerships
SL Green Operating Partnership, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
Year Ended December 31,
2020
2019
2018
$
804,423 $
983,557 $
120,163
128,158
195,590
59,848
1,052,744
1,238,995
1,227,392
183,200
176,315
29,043
116,679
11,794
313,668
35,298
503
91,826
958,326
(25,195)
2,961
187,522
215,506
(60,454)
—
414,758
(14,940)
(8,747)
391,071
(14,950)
234,676
190,764
33,188
190,521
11,653
272,358
—
729
100,875
1,034,764
(34,518)
76,181
69,389
(16,749)
(7,047)
—
291,487
3,159
(10,911)
283,735
(14,950)
978,574
201,492
47,326
229,347
186,351
32,965
208,669
12,408
279,507
6,839
1,099
92,631
1,049,816
7,311
303,967
57,385
(30,757)
(227,543)
(17,083)
270,856
6
(11,384)
259,478
(14,950)
244,528
2.75
2.75
88,652
89,071
Preferred unit distributions
Net income attributable to SLGOP
Perpetual preferred stock dividends
Basic earnings per unit:
Diluted earnings per unit:
Net income attributable to SLGOP common unitholders
376,121 $
268,785 $
$
$
$
4.88 $
4.87 $
3.19 $
3.19 $
Basic weighted average common units outstanding
Diluted weighted average common units and common unit equivalents
outstanding
76,647
77,243
83,690
84,234
The accompanying notes are an integral part of these consolidated financial statements.
36
37
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SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(in thousands, except per unit data)
(1)
On January 21, 2021, we completed a reverse stock split whereby every 1.02918 SL Green Operating Partnership common unit was combined into 1 SL
Green Operating Partnership common unit. We have retroactively adjusted the outstanding unit counts, unit activity, cash distributions declared, and
earnings per units, as if the reverse split occurred on December 31, 2017.
SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(in thousands, except per unit data)
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units (1)
Common
Unitholders
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling
Interests
Total
Balance at December 31, 2017
$ 221,932
90,172
$ 5,984,557
$
18,604
$
364,361
$ 6,589,454
Cumulative adjustment upon adoption of ASC 610-20
570,524
570,524
Balance at January 1, 2018
Net income (loss)
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
Reallocation of noncontrolling interests in the operating partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
withholdings
Repurchases of common units
Proceeds from stock options exercised
Contributions to consolidated joint venture interests
Deconsolidation of partially owned entity
Distributions to noncontrolling interests
Cash distributions declared ($3.3834 per common unit, none of which
represented a return of capital for federal income tax purposes)
Balance at December 31, 2018
Net income (loss)
Acquisition of subsidiary interest from noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
Reallocation of noncontrolling interest in the Operating Partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
withholdings
Repurchases of common units
Contributions to consolidated joint venture interests
Distributions to noncontrolling interests
Cash distributions declared ($3.5352 per common unit, none of which
represented a return of capital for federal income tax purposes)
$ 221,932
90,172
$ 6,555,081
$
18,604
$
364,361
$ 7,159,978
(3,496)
247,262
(14,950)
136
16,303
34,236
1
155
145
17,484
(9,469)
(937,795)
307
$
28,912
(6)
247,256
(3,496)
(14,950)
136
16,303
34,236
17,484
(937,795)
28,912
5,459
5,459
(315,116)
(315,116)
(8,364)
(8,364)
$ 221,932
81,311
$ 5,664,481
$
15,108
$
46,334
$ 5,947,855
(282,188)
(282,188)
(43,593)
270,434
(569)
(14,950)
334
471
(34,320)
4
5
102
25,763
(4,466)
(384,399)
(3,159)
267,275
(25,276)
(25,845)
(43,593)
(14,950)
334
471
(34,320)
25,763
(384,399)
58,462
58,462
(478)
(478)
(279,377)
(279,377)
Balance at December 31, 2019
$ 221,932
76,956
$ 5,247,868
$
(28,485) $
75,883
$ 5,517,198
Cumulative adjustment upon adoption of ASC 326
(39,184)
(39,184)
Balance at January 1, 2020
Net income
Acquisition of subsidiary interest from noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
Reallocation of noncontrolling interest in the Operating Partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
withholdings
Repurchases of common units
Contributions to consolidated joint venture interests
Distributions to noncontrolling interests
Cash distributions declared ($4.7908 per common unit, none of which
represented a return of capital for federal income tax purposes)
$ 221,932
76,956
$ 5,208,684
$
(28,485) $
75,883
$ 5,478,014
371,055
(3,123)
(14,950)
1,006
8,744
32,598
17
98
(34)
25,271
(8,529)
(532,262)
14,940
385,995
1,587
(38,762)
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
25,271
(532,262)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
Balance at December 31, 2020
$ 221,932
68,508
$ 4,755,078
$
(67,247) $
26,032
$ 4,935,795
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39
SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(in thousands, except per unit data)
SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(in thousands, except per unit data)
(1)
On January 21, 2021, we completed a reverse stock split whereby every 1.02918 SL Green Operating Partnership common unit was combined into 1 SL
Green Operating Partnership common unit. We have retroactively adjusted the outstanding unit counts, unit activity, cash distributions declared, and
earnings per units, as if the reverse split occurred on December 31, 2017.
Balance at December 31, 2017
$ 221,932
90,172
$ 5,984,557
$
18,604
$
364,361
$ 6,589,454
Cumulative adjustment upon adoption of ASC 610-20
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units (1)
Common
Unitholders
Comprehensive
(Loss) Income
Noncontrolling
Interests
Total
Accumulated
Other
$ 221,932
90,172
$ 6,555,081
$
18,604
$
364,361
$ 7,159,978
(6)
247,256
(3,496)
Balance at January 1, 2018
Net income (loss)
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
Reallocation of noncontrolling interests in the operating partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
withholdings
Repurchases of common units
Proceeds from stock options exercised
Contributions to consolidated joint venture interests
Deconsolidation of partially owned entity
Distributions to noncontrolling interests
Cash distributions declared ($3.3834 per common unit, none of which
represented a return of capital for federal income tax purposes)
Acquisition of subsidiary interest from noncontrolling interest
Balance at December 31, 2018
Net income (loss)
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
Reallocation of noncontrolling interest in the Operating Partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
withholdings
Repurchases of common units
Contributions to consolidated joint venture interests
Distributions to noncontrolling interests
Cash distributions declared ($3.5352 per common unit, none of which
represented a return of capital for federal income tax purposes)
Cumulative adjustment upon adoption of ASC 326
Acquisition of subsidiary interest from noncontrolling interest
Balance at January 1, 2020
Net income
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of common units
withholdings
Repurchases of common units
Reallocation of noncontrolling interest in the Operating Partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
$ 221,932
81,311
$ 5,664,481
$
15,108
$
46,334
$ 5,947,855
570,524
247,262
(14,950)
136
16,303
34,236
1
155
145
17,484
(9,469)
(937,795)
307
$
28,912
102
25,763
(4,466)
(384,399)
(282,188)
270,434
(569)
(14,950)
334
471
(34,320)
(279,377)
(39,184)
371,055
(3,123)
(14,950)
1,006
8,744
32,598
4
5
17
98
(34)
25,271
(8,529)
(532,262)
5,459
(315,116)
(315,116)
(8,364)
(8,364)
(3,159)
267,275
(25,276)
(25,845)
(43,593)
58,462
58,462
(478)
(478)
570,524
(3,496)
(14,950)
136
16,303
34,236
17,484
(937,795)
28,912
5,459
(282,188)
(43,593)
(14,950)
334
471
(34,320)
25,763
(384,399)
(279,377)
(39,184)
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
25,271
(532,262)
Balance at December 31, 2019
$ 221,932
76,956
$ 5,247,868
$
(28,485) $
75,883
$ 5,517,198
$ 221,932
76,956
$ 5,208,684
$
(28,485) $
75,883
$ 5,478,014
14,940
385,995
1,587
(38,762)
Contributions to consolidated joint venture interests
Distributions to noncontrolling interests
Cash distributions declared ($4.7908 per common unit, none of which
represented a return of capital for federal income tax purposes)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
Balance at December 31, 2020
$ 221,932
68,508
$ 4,755,078
$
(67,247) $
26,032
$ 4,935,795
38
39
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SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Operating Activities
Net income
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss (income) from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
325,462
25,195
679
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate
(2,961)
Purchase price and other fair value adjustments
Depreciable real estate reserves and impairments
(Gain) loss on sale of real estate, net
Loan loss reserves and other investment reserves, net of recoveries
Loss on early extinguishment of debt
Deferred rents receivable
Non-cash lease expense
Other non-cash adjustments
Changes in operating assets and liabilities:
Tenant and other receivables
Related party receivables
Deferred lease costs
Other assets
Accounts payable, accrued expenses, other liabilities and security deposits
Deferred revenue
Change in lease liability - operating leases
Net cash provided by operating activities
Investing Activities
Acquisitions of real estate property
Additions to land, buildings and improvements
Acquisition deposits and deferred purchase price
Investments in unconsolidated joint ventures
Distributions in excess of cumulative earnings from unconsolidated joint ventures
Net proceeds from disposition of real estate/joint venture interest
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
284,011
34,518
864
(76,181)
(69,389)
7,047
16,749
—
—
(13,941)
13,744
271
(4,968)
7,802
(70,938)
(18,630)
(25,597)
10,824
(11,200)
289,899
(7,311)
10,277
(303,967)
(57,385)
227,543
30,757
6,839
17,083
(18,216)
2,016
2,932
6,968
(1,044)
(44,158)
(8,310)
4,410
12,348
—
376,473
441,537
(187,522)
60,454
(215,506)
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
$
(86,846) $
(262,591) $
(60,486)
(458,140)
(252,986)
(254,460)
—
(5,239)
—
(70,315)
124,572
1,112,382
32,479
(128,682)
(400,429)
79,020
208,302
233,118
1,231,004
(7,869)
(38,912)
(360,953)
(607,844)
(731,216)
763,251
1,092,383
1,056,430
114,494
703,043
681,662
Proceeds from revolving credit facility and senior unsecured notes
1,495,000
1,310,000
3,120,000
Repayments of revolving credit facility and senior unsecured notes
(1,875,000)
(1,570,000)
(2,560,000)
Payment of debt extinguishment costs
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common units
Redemption of preferred units
Redemption of OP units
Distributions to noncontrolling interests in other partnerships
Contributions from noncontrolling interests in other partnerships
Acquisition of subsidiary interest from noncontrolling interest
Distributions paid on common and preferred units
Other obligations related to mortgage loan participations
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
Supplemental cash flow disclosures:
Interest paid
Income taxes paid
Redemption of units in the Operating Partnership for a joint venture sale
Exchange of preferred equity investment for real estate or equity in joint venture
Exchange of debt investment for real estate or equity in joint venture
Issuance of preferred units relating to a real estate acquisition
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Deconsolidation of a subsidiary
Deconsolidation of a subsidiary mortgage
Mortgages assumed in connection with sale of real estate
Seller financed purchases
Debt and preferred equity investments
Transfer of assets related to assets held for sale
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Year Ended December 31,
2020
2019
2018
$
1,181,892 $
752,984 $
564,391
(1,186,828)
(230,076)
(868,842)
(528,483)
(384,399)
(979,541)
—
1,006
(82,750)
(27,342)
(85,468)
12,477
(1,536)
—
(4,752)
(70,036)
(833)
—
334
(18,142)
(27,495)
(478)
10,239
(25,845)
—
(3,495)
(21,162)
—
(13,918)
29,048
(1,208)
(33,972)
(8,364)
5,459
—
16
—
(3,842)
(15,109)
(306,648)
(321,115)
(328,230)
(1,479,301)
(528,650)
(1,094,112)
131,365
241,430
(37,683)
279,113
29,087
250,026
201,348 $
248,684 $
259,776
2,296 $
1,489 $
1,418
$
$
$
—
119,497
122,796
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
391,664
—
—
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
—
—
391,664
16,303
10,445
298,956
34,236
298,404
—
—
—
—
—
—
—
—
—
—
Cash, cash equivalents, and restricted cash at end of period
$
372,795 $
241,430 $
279,113
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
8,744 $
471 $
Removal of fully depreciated commercial real estate properties
66,169
19,577
124,249
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40
41
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2020
2019
2018
$
414,758 $
291,487 $
270,856
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
Year Ended December 31,
2020
2019
2018
$
1,181,892 $
752,984 $
564,391
(1,186,828)
(230,076)
(868,842)
Proceeds from revolving credit facility and senior unsecured notes
1,495,000
1,310,000
3,120,000
Repayments of revolving credit facility and senior unsecured notes
(1,875,000)
(1,570,000)
(2,560,000)
Payment of debt extinguishment costs
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common units
Redemption of preferred units
Redemption of OP units
Distributions to noncontrolling interests in other partnerships
Contributions from noncontrolling interests in other partnerships
Acquisition of subsidiary interest from noncontrolling interest
Distributions paid on common and preferred units
Other obligations related to mortgage loan participations
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
—
1,006
—
334
(13,918)
29,048
(528,483)
(384,399)
(979,541)
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(18,142)
(27,495)
(478)
10,239
(25,845)
(1,208)
(33,972)
(8,364)
5,459
—
(306,648)
(321,115)
(328,230)
—
(4,752)
(70,036)
(833)
—
(3,495)
(21,162)
—
16
(3,842)
(15,109)
—
(1,479,301)
(528,650)
(1,094,112)
131,365
241,430
(37,683)
279,113
29,087
250,026
Accounts payable, accrued expenses, other liabilities and security deposits
Cash, cash equivalents, and restricted cash at end of period
$
372,795 $
241,430 $
279,113
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss (income) from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Purchase price and other fair value adjustments
Depreciable real estate reserves and impairments
(Gain) loss on sale of real estate, net
Loan loss reserves and other investment reserves, net of recoveries
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate
(2,961)
Loss on early extinguishment of debt
Deferred rents receivable
Non-cash lease expense
Other non-cash adjustments
Changes in operating assets and liabilities:
Tenant and other receivables
Related party receivables
Deferred lease costs
Other assets
Deferred revenue
Change in lease liability - operating leases
Net cash provided by operating activities
Investing Activities
Acquisitions of real estate property
Additions to land, buildings and improvements
Acquisition deposits and deferred purchase price
Investments in unconsolidated joint ventures
Distributions in excess of cumulative earnings from unconsolidated joint ventures
Net proceeds from disposition of real estate/joint venture interest
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
325,462
25,195
679
(187,522)
60,454
(215,506)
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
284,011
34,518
864
(76,181)
(69,389)
7,047
16,749
—
—
(13,941)
13,744
271
(4,968)
7,802
(70,938)
(18,630)
(25,597)
10,824
(11,200)
289,899
(7,311)
10,277
(303,967)
(57,385)
227,543
30,757
6,839
17,083
(18,216)
2,016
2,932
6,968
(1,044)
(44,158)
(8,310)
4,410
12,348
—
376,473
441,537
$
(86,846) $
(262,591) $
(60,486)
(458,140)
(252,986)
(254,460)
—
(5,239)
—
(70,315)
124,572
1,112,382
32,479
(128,682)
(400,429)
79,020
208,302
233,118
1,231,004
(7,869)
(38,912)
(360,953)
(607,844)
(731,216)
763,251
1,092,383
1,056,430
114,494
703,043
681,662
201,348 $
248,684 $
259,776
2,296 $
1,489 $
1,418
8,744 $
471 $
$
$
$
Supplemental cash flow disclosures:
Interest paid
Income taxes paid
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
Redemption of units in the Operating Partnership for a joint venture sale
Exchange of preferred equity investment for real estate or equity in joint venture
Exchange of debt investment for real estate or equity in joint venture
Issuance of preferred units relating to a real estate acquisition
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Deconsolidation of a subsidiary
Deconsolidation of a subsidiary mortgage
Mortgages assumed in connection with sale of real estate
Seller financed purchases
Debt and preferred equity investments
Transfer of assets related to assets held for sale
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Removal of fully depreciated commercial real estate properties
—
119,497
122,796
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
391,664
—
66,169
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
391,664
—
—
16,303
10,445
—
298,956
—
—
34,236
298,404
—
—
—
—
—
—
—
19,577
124,249
40
41
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SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Contribution to consolidated joint venture by noncontrolling interest
Distributions to noncontrolling interests
Share repurchase payable
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
Year Ended December 31,
2020
2019
2018
—
6,613
3,779
119,725
61,990
48,223
—
—
—
389,120
—
—
—
—
—
In December 2020, the Operating Partnership declared a regular monthly distribution per unit of $0.3122 and a special
distribution per unit of $1.7462 that was paid primarily in units. These distributions were paid in January 2021. In December
2019 and 2018, the Operating Partnership declared quarterly distributions per unit of $0.9108 and $0.8748, respectively. These
distributions were paid in January 2020 and 2019, respectively. These distribution amounts have been retroactively adjusted to
reflect the reverse stock split that was effectuated in January 2021.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the
consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash
2020
2019
2018
$
$
266,059 $
166,070 $
129,475
106,736
75,360
149,638
372,795 $
241,430 $
279,113
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended
including the Operating Partnership.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements
December 31, 2020
1. Organization and Basis of Presentation
SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green
Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were
formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its
affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as
well as 95% of the economic interest in the management, leasing and construction companies which are referred to as the
Service Corporation. All of the management, leasing and construction services that are provided to the properties that are
wholly-owned by us and that are provided to certain joint ventures are conducted through SL Green Management LLC which is
100% owned by the Operating Partnership. The Company has qualified, and expects to qualify in the current fiscal year, as a
real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-
administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to
stockholders, is permitted to minimize the payment of Federal income taxes at the corporate level. Unless the context requires
otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company,
Location
Commercial:
Manhattan
Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. The
Company is the sole managing general partner of the Operating Partnership. As of December 31, 2020, noncontrolling investors
held, in the aggregate, a 5.44% limited partnership interest in the Operating Partnership, inclusive of retroactive adjustments to
reflect the reverse stock split effectuated by SL Green in January 2021. We refer to these interests as the noncontrolling
interests in the Operating Partnership. The Operating Partnership is considered a variable interest entity, or VIE, in which we
are the primary beneficiary. See Note 11, "Noncontrolling Interests on the Company's Consolidated Financial Statements."
As of December 31, 2020, we owned the following interests in properties in the New York metropolitan area, primarily in
midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
Consolidated
Unconsolidated
Total
Property
Type
Number of
Properties
Approximate
Square Feet
(unaudited)
Number of
Properties
Approximate
Square Feet
(unaudited)
Number of
Properties
Approximate
Square Feet
(unaudited)
Weighted
Average
Occupancy(1)
(unaudited)
Office
Retail
Development/
Redevelopment
(1)
18
10,681,045
11
11,841,483
29
22,522,528
44,189
1,095,418
9
3
301,996
2,927,782
13
11
346,185
4,023,200
11,820,652
23
15,071,261
53
26,891,913
Suburban
Office
862,800
—
—
7
862,800
Total commercial properties
12,683,452
23
15,071,261
60
27,754,713
Residential:
Manhattan
Residential
Total portfolio
82,250
8
1,663,774
9
1,746,024
12,765,702
31
16,735,035
69
29,500,737
4
8
30
7
37
1
38
92.4 %
94.2 %
N/A
92.5 %
83.3 %
92.1 %
75.7 %
91.2 %
(1)
The weighted average occupancy for commercial properties represents the total occupied square footage divided by the total square footage at
acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by the total available units.
As of December 31, 2020, we also managed two office buildings owned by third parties encompassing approximately 2.1
million square feet (unaudited) and held debt and preferred equity investments with a book value of $1.1 billion, excluding $0.1
billion of debt and preferred equity investments and other financing receivables that are included in balance sheet line items
other than the Debt and Preferred Equity Investments line item.
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42
43
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Contribution to consolidated joint venture by noncontrolling interest
Distributions to noncontrolling interests
Share repurchase payable
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
Year Ended December 31,
2020
2019
2018
—
6,613
3,779
119,725
61,990
48,223
—
—
—
389,120
—
—
—
—
—
In December 2020, the Operating Partnership declared a regular monthly distribution per unit of $0.3122 and a special
distribution per unit of $1.7462 that was paid primarily in units. These distributions were paid in January 2021. In December
2019 and 2018, the Operating Partnership declared quarterly distributions per unit of $0.9108 and $0.8748, respectively. These
distributions were paid in January 2020 and 2019, respectively. These distribution amounts have been retroactively adjusted to
reflect the reverse stock split that was effectuated in January 2021.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the
consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents, and restricted cash
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended
2020
2019
2018
$
$
266,059 $
166,070 $
129,475
106,736
75,360
149,638
372,795 $
241,430 $
279,113
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements
December 31, 2020
1. Organization and Basis of Presentation
SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green
Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were
formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its
affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as
well as 95% of the economic interest in the management, leasing and construction companies which are referred to as the
Service Corporation. All of the management, leasing and construction services that are provided to the properties that are
wholly-owned by us and that are provided to certain joint ventures are conducted through SL Green Management LLC which is
100% owned by the Operating Partnership. The Company has qualified, and expects to qualify in the current fiscal year, as a
real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-
administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to
stockholders, is permitted to minimize the payment of Federal income taxes at the corporate level. Unless the context requires
otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company,
including the Operating Partnership.
Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. The
Company is the sole managing general partner of the Operating Partnership. As of December 31, 2020, noncontrolling investors
held, in the aggregate, a 5.44% limited partnership interest in the Operating Partnership, inclusive of retroactive adjustments to
reflect the reverse stock split effectuated by SL Green in January 2021. We refer to these interests as the noncontrolling
interests in the Operating Partnership. The Operating Partnership is considered a variable interest entity, or VIE, in which we
are the primary beneficiary. See Note 11, "Noncontrolling Interests on the Company's Consolidated Financial Statements."
As of December 31, 2020, we owned the following interests in properties in the New York metropolitan area, primarily in
midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
Consolidated
Unconsolidated
Total
Property
Type
Number of
Properties
Approximate
Square Feet
(unaudited)
Number of
Properties
Approximate
Square Feet
(unaudited)
Number of
Properties
Approximate
Square Feet
(unaudited)
Weighted
Average
Occupancy(1)
(unaudited)
Location
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
18
10,681,045
11
11,841,483
29
22,522,528
4
8
30
7
37
1
38
44,189
1,095,418
9
3
301,996
2,927,782
13
11
346,185
4,023,200
11,820,652
23
15,071,261
53
26,891,913
862,800
—
—
7
862,800
12,683,452
23
15,071,261
60
27,754,713
82,250
8
1,663,774
9
1,746,024
12,765,702
31
16,735,035
69
29,500,737
92.4 %
94.2 %
N/A
92.5 %
83.3 %
92.1 %
75.7 %
91.2 %
(1)
The weighted average occupancy for commercial properties represents the total occupied square footage divided by the total square footage at
acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by the total available units.
As of December 31, 2020, we also managed two office buildings owned by third parties encompassing approximately 2.1
million square feet (unaudited) and held debt and preferred equity investments with a book value of $1.1 billion, excluding $0.1
billion of debt and preferred equity investments and other financing receivables that are included in balance sheet line items
other than the Debt and Preferred Equity Investments line item.
42
43
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Partnership Agreement
In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, we
allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners,
subject to the priority distributions with respect to preferred units and special provisions that apply to LTIP Units. As the
managing general partner of the Operating Partnership, we are required to take such reasonable efforts, as determined by us in
our sole discretion, to cause the Operating Partnership to distribute sufficient amounts to enable the payment of sufficient
dividends by us to minimize any Federal income or excise tax at the Company level. Under the Operating Partnership
Agreement, each limited partner has the right to redeem units of limited partnership interests for cash, or if we so elect, shares
of SL Green's common stock on a one-for-one basis.
Subsequent Events
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
In January 2021, the Company closed on the sale of 712 Madison Avenue for a gross sales price of $43.0 million,
factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
pursuant to the exercise of a purchase option by the ground lessee of the property.
2. Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or
controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities,
but where we are not the primary beneficiary, are accounted for under the equity method. See Note 5, "Debt and Preferred
Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and
transactions have been eliminated.
We consolidate a VIE in which we are considered the primary beneficiary. The primary beneficiary is the entity that has
(i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to
absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.
A noncontrolling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary
not attributable, directly or indirectly, to us. Noncontrolling interests are required to be presented as a separate component of
equity in the consolidated balance sheet and the presentation of net income is modified to present earnings and other
comprehensive income attributed to controlling and noncontrolling interests.
We assess the accounting treatment for each joint venture and debt and preferred equity investment. This assessment
includes a review of each joint venture or limited liability company agreement to determine the rights provided to each party
and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which
party has the power to direct the activities that most significantly impact the entity's economic performance. In situations where
we and our partner approve, among other things, the annual budget, receive a detailed monthly reporting package, meet on a
quarterly basis to review the results of the joint venture, review and approve the joint venture's tax return before filing, and
approve all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do
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not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the
activities that most significantly impact the performance of the joint venture. Our joint venture agreements typically contain
certain protective rights such as requiring partner approval to sell, finance or refinance the property and the payment of capital
expenditures and operating expenditures outside of the approved budget or operating plan.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the
development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated
useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an
acquired entity at their respective fair values on the acquisition date. When we acquire our partner's equity interest in an
existing unconsolidated joint venture and gain control over the investment, we record the consolidated investment at fair value.
The difference between the book value of our equity investment on the purchase date and our share of the fair value of the
investment's purchase price is recorded as a purchase price fair value adjustment in our consolidated statements of operations.
See Note 3, "Property Acquisitions."
We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to
be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place
leases. We depreciate the amount allocated to building (inclusive of tenant improvements) over their estimated useful lives,
which generally range from 3 years to 40 years. We amortize the amount allocated to the above- and below-market leases over
the remaining term of the associated lease, which generally range from 1 year to 14 years, and record it as either an increase (in
the case of below-market leases) or a decrease (in the case of above-market leases) to rental income. We amortize the amount
allocated to the values associated with in-place leases over the expected term of the associated lease, which generally ranges
from 1 year to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are
being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and
origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is
terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections
that utilize appropriate discount rates and available market information. Estimates of future cash flows are based on a number of
To the extent acquired leases contain fixed rate renewal options that are below-market and determined to be material, we
amortize such below-market lease value into rental income over the renewal period. As of December 31, 2020, the weighted
average amortization period for above-market leases, below-market leases, and in-place lease costs is 6.3 years, 5.6 years, and
5.3 years, respectively.
The Company classifies those leases under which the Company is the lessee at lease commencement as finance or
operating leases. Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the
lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the
remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the
asset. Leases that do not qualify as finance leases are deemed to be operating leases. At lease commencement the Company
records a lease liability which is measured as the present value of the lease payments and a right of use asset which is measured
as the amount of the lease liability and any initial direct costs incurred. The Company applies a discount rate to determine the
present value of the lease payments. If the rate implicit in the lease is known, the Company uses that rate. If the rate implicit in
the lease is not known, the Company uses a discount rate reflective of the Company’s collateralized borrowing rate given the
term of the lease. To determine the discount rate, the Company employs a third party specialist to develop an analysis based
primarily on the observable borrowing rates of the Company, other REITs, and other corporate borrowers with long-term
borrowings. On the consolidated statements of operations, operating leases are expensed through operating lease rent while
financing leases are expensed through amortization and interest expense. On the consolidated balance sheet, financing leases
include the amounts previously captioned "Properties under capital lease." When applicable, the Company combines the
consideration for lease and non-lease components in the calculation of the value of the lease obligation and right-of-use asset.
We incur a variety of costs in the development and leasing of our properties. After the determination is made to capitalize
a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is
substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under
development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs
essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Partnership Agreement
In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, we
allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners,
subject to the priority distributions with respect to preferred units and special provisions that apply to LTIP Units. As the
managing general partner of the Operating Partnership, we are required to take such reasonable efforts, as determined by us in
our sole discretion, to cause the Operating Partnership to distribute sufficient amounts to enable the payment of sufficient
dividends by us to minimize any Federal income or excise tax at the Company level. Under the Operating Partnership
Agreement, each limited partner has the right to redeem units of limited partnership interests for cash, or if we so elect, shares
of SL Green's common stock on a one-for-one basis.
Subsequent Events
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
In January 2021, the Company closed on the sale of 712 Madison Avenue for a gross sales price of $43.0 million,
pursuant to the exercise of a purchase option by the ground lessee of the property.
2. Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or
controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities,
but where we are not the primary beneficiary, are accounted for under the equity method. See Note 5, "Debt and Preferred
Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and
transactions have been eliminated.
We consolidate a VIE in which we are considered the primary beneficiary. The primary beneficiary is the entity that has
(i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to
absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.
A noncontrolling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary
not attributable, directly or indirectly, to us. Noncontrolling interests are required to be presented as a separate component of
equity in the consolidated balance sheet and the presentation of net income is modified to present earnings and other
comprehensive income attributed to controlling and noncontrolling interests.
We assess the accounting treatment for each joint venture and debt and preferred equity investment. This assessment
includes a review of each joint venture or limited liability company agreement to determine the rights provided to each party
and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which
party has the power to direct the activities that most significantly impact the entity's economic performance. In situations where
we and our partner approve, among other things, the annual budget, receive a detailed monthly reporting package, meet on a
quarterly basis to review the results of the joint venture, review and approve the joint venture's tax return before filing, and
approve all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do
not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the
activities that most significantly impact the performance of the joint venture. Our joint venture agreements typically contain
certain protective rights such as requiring partner approval to sell, finance or refinance the property and the payment of capital
expenditures and operating expenditures outside of the approved budget or operating plan.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the
development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated
useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an
acquired entity at their respective fair values on the acquisition date. When we acquire our partner's equity interest in an
existing unconsolidated joint venture and gain control over the investment, we record the consolidated investment at fair value.
The difference between the book value of our equity investment on the purchase date and our share of the fair value of the
investment's purchase price is recorded as a purchase price fair value adjustment in our consolidated statements of operations.
See Note 3, "Property Acquisitions."
We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to
be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place
leases. We depreciate the amount allocated to building (inclusive of tenant improvements) over their estimated useful lives,
which generally range from 3 years to 40 years. We amortize the amount allocated to the above- and below-market leases over
the remaining term of the associated lease, which generally range from 1 year to 14 years, and record it as either an increase (in
the case of below-market leases) or a decrease (in the case of above-market leases) to rental income. We amortize the amount
allocated to the values associated with in-place leases over the expected term of the associated lease, which generally ranges
from 1 year to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are
being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and
origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is
terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections
that utilize appropriate discount rates and available market information. Estimates of future cash flows are based on a number of
factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
To the extent acquired leases contain fixed rate renewal options that are below-market and determined to be material, we
amortize such below-market lease value into rental income over the renewal period. As of December 31, 2020, the weighted
average amortization period for above-market leases, below-market leases, and in-place lease costs is 6.3 years, 5.6 years, and
5.3 years, respectively.
The Company classifies those leases under which the Company is the lessee at lease commencement as finance or
operating leases. Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the
lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the
remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the
asset. Leases that do not qualify as finance leases are deemed to be operating leases. At lease commencement the Company
records a lease liability which is measured as the present value of the lease payments and a right of use asset which is measured
as the amount of the lease liability and any initial direct costs incurred. The Company applies a discount rate to determine the
present value of the lease payments. If the rate implicit in the lease is known, the Company uses that rate. If the rate implicit in
the lease is not known, the Company uses a discount rate reflective of the Company’s collateralized borrowing rate given the
term of the lease. To determine the discount rate, the Company employs a third party specialist to develop an analysis based
primarily on the observable borrowing rates of the Company, other REITs, and other corporate borrowers with long-term
borrowings. On the consolidated statements of operations, operating leases are expensed through operating lease rent while
financing leases are expensed through amortization and interest expense. On the consolidated balance sheet, financing leases
include the amounts previously captioned "Properties under capital lease." When applicable, the Company combines the
consideration for lease and non-lease components in the calculation of the value of the lease obligation and right-of-use asset.
We incur a variety of costs in the development and leasing of our properties. After the determination is made to capitalize
a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is
substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under
development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs
essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
related costs and other costs incurred during the period of development. We consider a construction project as substantially
completed and held available for occupancy upon the completion of tenant improvements, but no later than one year after major
construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for
occupancy, and capitalize only those costs associated with the portions under construction.
Properties other than Right of use assets - operating leases are depreciated using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives are as follows:
Category
Building (fee ownership)
Building improvements
Building (leasehold interest)
Term
40 years
shorter of remaining life of the building or useful life
lesser of 40 years or remaining term of the lease
Right of use assets - financing leases
lesser of 40 years or remaining lease term
Furniture and fixtures
Tenant improvements
4 to 7 years
shorter of remaining term of the lease or useful life
Right of use assets - operating leases are amortized over the remaining lease term. The amortization is made up of the
principal amortization under the lease liability plus or minus the straight line adjustment of the operating lease rent under ASC
840.
Depreciation expense (including amortization of right of use assets - financing leases) totaled $277.5 million, $233.5
million, and $242.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.
On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be
impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's
estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the
property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property
over the fair value of the property as calculated in accordance with ASC 820.
We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate
assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no
longer recorded.
We recognized $5.9 million, $4.5 million, and $6.8 million of rental revenue for the years ended December 31, 2020,
2019, and 2018, respectively, for the amortization of aggregate below-market leases in excess of above-market leases, resulting
from the allocation of the purchase price of the applicable properties.
The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and
intangible liabilities (acquired below-market leases) as of December 31, 2020 and 2019 (in thousands):
Identified intangible assets (included in other assets):
Gross amount
Accumulated amortization
Net (1)
Identified intangible liabilities (included in deferred revenue):
Gross amount
Accumulated amortization
Net (1)
December 31,
2020
2019
$
$
$
$
215,673 $
(190,523)
25,150 $
241,409 $
(230,479)
10,930 $
255,198
(228,223)
26,975
282,048
(249,514)
32,534
(1) As of December 31, 2020, no net intangible assets and no net intangible liabilities were reclassified to assets held for sale and liabilities related to assets
held for sale. As of December 31, 2019, no net intangible assets and no net intangible liabilities were reclassified to assets held for sale and liabilities
related to assets held for sale.
The estimated annual amortization of acquired above-market leases, net of acquired (below-market) leases (a component
of rental revenue), for each of the five succeeding years is as follows (in thousands):
2021
2022
2023
2024
2025
2021
2022
2023
2024
2025
(1,403)
(119)
91
258
781
4,899
3,456
2,841
2,520
1,427
The estimated annual amortization of all other identifiable assets (a component of depreciation and amortization expense)
including tenant improvements for each of the five succeeding years is as follows (in thousands):
We consider all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Restricted cash primarily consists of security deposits held on behalf of our tenants, interest reserves, as well as capital
improvement and real estate tax escrows required under certain loan agreements.
Cash and Cash Equivalents
Restricted Cash
Fair Value Measurements
See Note 16, "Fair Value Measurements."
Investment in Marketable Securities
At acquisition, we designate a security as held-to-maturity, available-for-sale, or trading. As of December 31, 2020, we
did not have any securities designated as held-to-maturity or trading. We account for our available-for-sale securities at fair
value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a
component of accumulated other comprehensive income or loss. The cost of marketable securities sold and the amount
reclassified out of accumulated other comprehensive income into earnings is determined using the specific identification
method. Credit losses are recognized in accordance with ASC 326.
At December 31, 2020 and 2019, we held the following marketable securities (in thousands):
Commercial mortgage-backed securities
Total marketable securities available-for-sale
December 31,
2020
2019
$
$
28,570 $
28,570 $
29,887
29,887
The cost basis of the commercial mortgage-backed securities was $27.5 million at both December 31, 2020 and 2019.
These securities mature at various times through 2035. All were in an unrealized gain position at December 31, 2020 except for
1 security, which had an unrealized loss of $0.7 million, had been in a continuous unrealized loss position for less than 12
months, and had a fair value of $7.0 million. All were in an unrealized gain position at December 31, 2019. We held no equity
marketable securities at December 31, 2020 and 2019.
During the years ended December 31, 2020, 2019 and 2018, we did not dispose of any marketable securities.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
related costs and other costs incurred during the period of development. We consider a construction project as substantially
The estimated annual amortization of acquired above-market leases, net of acquired (below-market) leases (a component
completed and held available for occupancy upon the completion of tenant improvements, but no later than one year after major
of rental revenue), for each of the five succeeding years is as follows (in thousands):
construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for
occupancy, and capitalize only those costs associated with the portions under construction.
Properties other than Right of use assets - operating leases are depreciated using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives are as follows:
Right of use assets - financing leases
lesser of 40 years or remaining lease term
Term
shorter of remaining life of the building or useful life
lesser of 40 years or remaining term of the lease
40 years
4 to 7 years
shorter of remaining term of the lease or useful life
Category
Building (fee ownership)
Building improvements
Building (leasehold interest)
Furniture and fixtures
Tenant improvements
840.
Right of use assets - operating leases are amortized over the remaining lease term. The amortization is made up of the
principal amortization under the lease liability plus or minus the straight line adjustment of the operating lease rent under ASC
Depreciation expense (including amortization of right of use assets - financing leases) totaled $277.5 million, $233.5
million, and $242.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.
On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be
impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's
estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the
property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property
over the fair value of the property as calculated in accordance with ASC 820.
We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate
assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no
longer recorded.
We recognized $5.9 million, $4.5 million, and $6.8 million of rental revenue for the years ended December 31, 2020,
2019, and 2018, respectively, for the amortization of aggregate below-market leases in excess of above-market leases, resulting
from the allocation of the purchase price of the applicable properties.
The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and
intangible liabilities (acquired below-market leases) as of December 31, 2020 and 2019 (in thousands):
Identified intangible assets (included in other assets):
Gross amount
Accumulated amortization
Net (1)
Net (1)
Gross amount
Accumulated amortization
Identified intangible liabilities (included in deferred revenue):
December 31,
2020
2019
$
$
$
$
215,673 $
(190,523)
25,150 $
241,409 $
(230,479)
10,930 $
255,198
(228,223)
26,975
282,048
(249,514)
32,534
(1) As of December 31, 2020, no net intangible assets and no net intangible liabilities were reclassified to assets held for sale and liabilities related to assets
held for sale. As of December 31, 2019, no net intangible assets and no net intangible liabilities were reclassified to assets held for sale and liabilities
related to assets held for sale.
2021
2022
2023
2024
2025
(1,403)
(119)
91
258
781
The estimated annual amortization of all other identifiable assets (a component of depreciation and amortization expense)
including tenant improvements for each of the five succeeding years is as follows (in thousands):
2021
2022
2023
2024
2025
Cash and Cash Equivalents
4,899
3,456
2,841
2,520
1,427
We consider all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Restricted Cash
Restricted cash primarily consists of security deposits held on behalf of our tenants, interest reserves, as well as capital
improvement and real estate tax escrows required under certain loan agreements.
Fair Value Measurements
See Note 16, "Fair Value Measurements."
Investment in Marketable Securities
At acquisition, we designate a security as held-to-maturity, available-for-sale, or trading. As of December 31, 2020, we
did not have any securities designated as held-to-maturity or trading. We account for our available-for-sale securities at fair
value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a
component of accumulated other comprehensive income or loss. The cost of marketable securities sold and the amount
reclassified out of accumulated other comprehensive income into earnings is determined using the specific identification
method. Credit losses are recognized in accordance with ASC 326.
At December 31, 2020 and 2019, we held the following marketable securities (in thousands):
Commercial mortgage-backed securities
Total marketable securities available-for-sale
December 31,
2020
2019
$
$
28,570 $
28,570 $
29,887
29,887
The cost basis of the commercial mortgage-backed securities was $27.5 million at both December 31, 2020 and 2019.
These securities mature at various times through 2035. All were in an unrealized gain position at December 31, 2020 except for
1 security, which had an unrealized loss of $0.7 million, had been in a continuous unrealized loss position for less than 12
months, and had a fair value of $7.0 million. All were in an unrealized gain position at December 31, 2019. We held no equity
marketable securities at December 31, 2020 and 2019.
During the years ended December 31, 2020, 2019 and 2018, we did not dispose of any marketable securities.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Investments in Unconsolidated Joint Ventures
Revenue Recognition
We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where
we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary.
We consolidate those joint ventures that we control or which are variable interest entities (each, a "VIE") and where we are
considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as
well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us
from consolidating these VIE entities. These investments are recorded initially at cost, as investments in unconsolidated joint
ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Equity in net
income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture
and includes adjustments related to basis differences in accounting for the investment. When a capital event (as defined in each
joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our
increased economic interest. We recognize incentive income from unconsolidated real estate joint ventures as income to the
extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures
in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future
obligations of the joint venture or may otherwise be committed to provide future additional financial support. We generally
finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space,
which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value
of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments
for impairment based on each joint ventures' actual and projected cash flows. We do not believe that the values of any of our
equity investments were impaired at December 31, 2020.
We may originate loans for real estate acquisition, development and construction ("ADC loans"), where we expect to
receive some of the residual profit from such projects. When the risk and rewards of these arrangements are essentially the same
as an investor or joint venture partner, we account for these arrangements as real estate investments under the equity method of
accounting for investments. Otherwise, we account for these arrangements consistent with the accounting for our debt and
preferred equity investments.
Deferred Lease Costs
Deferred lease costs consist of incremental fees and direct costs that would not have been incurred if the lease had not
been obtained and are amortized on a straight-line basis over the related lease term. Certain of our employees provide leasing
services to the wholly-owned properties. For the years ended December 31, 2020, 2019 and 2018, $5.4 million, $6.3 million,
and $15.7 million of their compensation, respectively, was capitalized and is amortized over an estimated average lease term of
eight years.
Deferred Financing Costs
Deferred financing costs represent commitment fees, legal, title and other third party costs associated with obtaining
commitments for financing which result in a closing of such financing. These costs are amortized over the terms of the
respective agreements. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid
before maturity. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is
determined that the financing will not close. Deferred financing costs related to a recognized debt liability are presented in the
consolidated balance sheet as a direct deduction from the carrying amount of that debt liability.
Lease Classification
Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not
classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if
the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the
economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds
substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any
value to the Company at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct
financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and
unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
Rental revenue for operating leases is recognized on a straight-line basis over the term of the lease. Rental revenue
recognition commences when the leased space is available for its intended use by the lessee.
To determine whether the leased space is available for its intended use by the lessee, management evaluates whether we
are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the
owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which
is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not
the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space.
When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts
funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed
by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements
for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in
deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis
over the term of the lease.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred
rents receivable on the consolidated balance sheets.
In addition to base rent, our tenants also generally will pay variable rent which represents their pro rata share of increases
in real estate taxes and certain operating expenses for the building over a base year. In some leases, in lieu of paying additional
rent based upon increases in certain building operating expenses, the tenant will pay additional rent based upon increases in the
wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over
the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base
rent to cover escalations. Electricity is most often supplied by the landlord either on a sub-metered basis, or rent inclusion basis
(i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or
increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and
freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the
tenant paying additional rent only for services which exceed base building services or for services which are provided outside
normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the
current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the
actual expenses for the current year.
Rental revenue is recognized if collectability is probable. If collectability of substantially all of the lease payments is
assessed as not probable, any difference between the rental revenue recognized to date and the lease payments that have been
collected is recognized as a current-period adjustment to rental revenue. A subsequent change in the assessment of collectability
to probable may result in a current-period adjustment to rental revenue for any difference between the rental revenue that would
have been recognized if collectability had always been assessed as probable and the rental revenue recognized to date.
We recognize lease concessions related to COVID-19, such as rent deferrals and abatements, in accordance with the
Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. When
total cash flows resulting from the modified lease are not substantially similar to the cash flows in the original lease, we account
for the concession agreement as a new lease.
The Company provides its tenants with certain customary services for lease contracts such as common area maintenance
and general security. We have elected to combine the non-lease components with the lease components of our operating lease
agreements and account for them as a single lease component in accordance with ASC 842.
Prior to the adoption of ASC 842, we maintained allowances for estimated losses on tenant receivables and deferred rent
receivables under our lease agreements. During the year ended December 31, 2018 we had $4.2 million of additions to these
allowances charged against operations and $8.9 million of uncollectible accounts written off or recovered within the period. The
combined ending balance of the allowances was $31.2 million as of December 31, 2018.
We record a gain or loss on sale of real estate assets when we no longer hold a controlling financial interest in the entity
holding the real estate, a contract exists with a third party and that third party has control of the assets acquired.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Investments in Unconsolidated Joint Ventures
Revenue Recognition
We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where
Rental revenue for operating leases is recognized on a straight-line basis over the term of the lease. Rental revenue
we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary.
recognition commences when the leased space is available for its intended use by the lessee.
We consolidate those joint ventures that we control or which are variable interest entities (each, a "VIE") and where we are
considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as
well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us
from consolidating these VIE entities. These investments are recorded initially at cost, as investments in unconsolidated joint
ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Equity in net
income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture
and includes adjustments related to basis differences in accounting for the investment. When a capital event (as defined in each
joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our
increased economic interest. We recognize incentive income from unconsolidated real estate joint ventures as income to the
extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures
in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future
obligations of the joint venture or may otherwise be committed to provide future additional financial support. We generally
finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space,
which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value
of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments
for impairment based on each joint ventures' actual and projected cash flows. We do not believe that the values of any of our
equity investments were impaired at December 31, 2020.
We may originate loans for real estate acquisition, development and construction ("ADC loans"), where we expect to
receive some of the residual profit from such projects. When the risk and rewards of these arrangements are essentially the same
as an investor or joint venture partner, we account for these arrangements as real estate investments under the equity method of
accounting for investments. Otherwise, we account for these arrangements consistent with the accounting for our debt and
preferred equity investments.
Deferred Lease Costs
eight years.
Deferred Financing Costs
Deferred lease costs consist of incremental fees and direct costs that would not have been incurred if the lease had not
been obtained and are amortized on a straight-line basis over the related lease term. Certain of our employees provide leasing
services to the wholly-owned properties. For the years ended December 31, 2020, 2019 and 2018, $5.4 million, $6.3 million,
and $15.7 million of their compensation, respectively, was capitalized and is amortized over an estimated average lease term of
Deferred financing costs represent commitment fees, legal, title and other third party costs associated with obtaining
commitments for financing which result in a closing of such financing. These costs are amortized over the terms of the
respective agreements. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid
before maturity. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is
determined that the financing will not close. Deferred financing costs related to a recognized debt liability are presented in the
consolidated balance sheet as a direct deduction from the carrying amount of that debt liability.
Lease Classification
Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not
classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if
the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the
economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds
substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any
value to the Company at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct
financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and
unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
To determine whether the leased space is available for its intended use by the lessee, management evaluates whether we
are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the
owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which
is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not
the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space.
When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts
funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed
by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements
for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in
deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis
over the term of the lease.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred
rents receivable on the consolidated balance sheets.
In addition to base rent, our tenants also generally will pay variable rent which represents their pro rata share of increases
in real estate taxes and certain operating expenses for the building over a base year. In some leases, in lieu of paying additional
rent based upon increases in certain building operating expenses, the tenant will pay additional rent based upon increases in the
wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over
the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base
rent to cover escalations. Electricity is most often supplied by the landlord either on a sub-metered basis, or rent inclusion basis
(i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or
increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and
freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the
tenant paying additional rent only for services which exceed base building services or for services which are provided outside
normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the
current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the
actual expenses for the current year.
Rental revenue is recognized if collectability is probable. If collectability of substantially all of the lease payments is
assessed as not probable, any difference between the rental revenue recognized to date and the lease payments that have been
collected is recognized as a current-period adjustment to rental revenue. A subsequent change in the assessment of collectability
to probable may result in a current-period adjustment to rental revenue for any difference between the rental revenue that would
have been recognized if collectability had always been assessed as probable and the rental revenue recognized to date.
We recognize lease concessions related to COVID-19, such as rent deferrals and abatements, in accordance with the
Lease Modification Q&A issued by the FASB in April 2020, which provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. When
total cash flows resulting from the modified lease are not substantially similar to the cash flows in the original lease, we account
for the concession agreement as a new lease.
The Company provides its tenants with certain customary services for lease contracts such as common area maintenance
and general security. We have elected to combine the non-lease components with the lease components of our operating lease
agreements and account for them as a single lease component in accordance with ASC 842.
Prior to the adoption of ASC 842, we maintained allowances for estimated losses on tenant receivables and deferred rent
receivables under our lease agreements. During the year ended December 31, 2018 we had $4.2 million of additions to these
allowances charged against operations and $8.9 million of uncollectible accounts written off or recovered within the period. The
combined ending balance of the allowances was $31.2 million as of December 31, 2018.
We record a gain or loss on sale of real estate assets when we no longer hold a controlling financial interest in the entity
holding the real estate, a contract exists with a third party and that third party has control of the assets acquired.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Investment income on debt and preferred equity investments is accrued based on the contractual terms of the instruments
and when it is deemed collectible. Some debt and preferred equity investments provide for accrual of interest at specified rates,
which differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's
determination that accrued interest is collectible. If management cannot make this determination, interest income above the
current pay rate is recognized only upon actual receipt.
Deferred origination fees, original issue discounts and loan origination costs, if any, are recognized as an adjustment to
interest income over the terms of the related investments using the effective interest method. Fees received in connection with
loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment
to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield
adjustment on the effective interest method based on expected cash flows through the expected maturity date of the related
investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to
recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the
investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral,
we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual
cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, the collection of which is expected, are
also recognized over the term of the loan as an adjustment to yield.
We consider a debt and preferred equity investment to be past due when amounts contractually due have not been paid.
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments become 90
days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest income
recognition is resumed on any debt or preferred equity investment that is on non-accrual status when such debt or preferred
equity investment becomes contractually current and performance is demonstrated to be resumed.
We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the
criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of
the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or
premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Debt and Preferred Equity Investments
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC
326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying
value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss
and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts
are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or
acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical
loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data
and external data which may include, among others, governmental economic projections for the New York City Metropolitan
area, public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset
class and adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we
may also use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be
collected for each outcome.
The evaluation of the possible credit deterioration associated with the performance and/or value of the underlying
collateral property as well as the financial and operating capability of the borrower/sponsor requires significant judgment,
which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through
“3,” from lower risk to higher risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 -
Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. Loans with risk ratings of 2 or
above are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our
expectations of current conditions, historical loss information and supportable forecasts described above or whether risk
characteristics specific to the loan warrant the use of a probability-weighted model.
Financing investments that are classified as held for sale are carried at the expected amount to be collected or fair market
value using available market information obtained through consultation with dealers or other originators of such investments as
well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management
may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its
expected amount to be collected.
Other financing receivables that are included in balance sheet line items other than the Debt and Preferred Equity
Investments line are also measured at the net amount expected to the be collected.
Accrued interest receivable amounts related to these debt and preferred equity investment and other financing receivables
are recorded at the net amount expected to be collected within Other assets in the consolidated balance sheets. Write offs of
accrued interest receivables are recognized as an expense for loan loss and other investment reserves.
Rent expense is recognized on a straight-line basis over the initial term of the lease. The excess of the rent expense
recognized over the amounts contractually due pursuant to the underlying lease is included in the lease liability - operating
Underwriting commissions and costs incurred in connection with our stock offerings are reflected as a reduction of
Rent Expense
leases on the consolidated balance sheets.
Underwriting Commissions and Costs
additional paid-in-capital.
Transaction Costs
Transaction costs for asset acquisitions are capitalized to the investment basis, which is then subject to a purchase price
allocation based on relative fair value. Transaction costs for business combinations or costs incurred on potential transactions
that are not consummated are expensed as incurred.
Income Taxes
SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal
income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its
stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, SL Green will be
subject to Federal income tax on its taxable income at regular corporate rates. SL Green may also be subject to certain state,
local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on its undistributed taxable
income.
The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the
partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated
statements of operations relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating
Partnership may also be subject to certain state, local and franchise taxes.
We have elected, and may elect in the future, to treat certain of our corporate subsidiaries as taxable REIT subsidiaries, or
TRSs. In general, TRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold
directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in
Federal and state income tax liability for these entities.
During the years ended December 31, 2020, 2019 and 2018, we recorded Federal, state and local tax provisions of $1.2
million, $1.5 million, and $2.8 million, respectively. For the year ended December 31, 2020, the Company paid distributions on
its common stock of $5.54 per share which represented $1.84 per share of ordinary income and $3.06 per share of capital gains.
For the year ended December 31, 2019, the Company paid distributions on its common stock of $3.40 per share which
represented $2.59 per share of ordinary income, and $0.81 per share of capital gains. For the year ended December 31, 2018,
the Company paid distributions on its common stock of $3.25 per share which represented $1.46 per share of ordinary income
and $1.79 per share of capital gains. In order to present information that is consistent with the tax forms issued with respect to
these tax years, these per-share numbers have not been retroactively adjusted to reflect the reverse stock split that was
effectuated in January 2021.
We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise
concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination.
Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Investment income on debt and preferred equity investments is accrued based on the contractual terms of the instruments
and when it is deemed collectible. Some debt and preferred equity investments provide for accrual of interest at specified rates,
which differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's
determination that accrued interest is collectible. If management cannot make this determination, interest income above the
current pay rate is recognized only upon actual receipt.
Financing investments that are classified as held for sale are carried at the expected amount to be collected or fair market
value using available market information obtained through consultation with dealers or other originators of such investments as
well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management
may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its
expected amount to be collected.
Deferred origination fees, original issue discounts and loan origination costs, if any, are recognized as an adjustment to
Other financing receivables that are included in balance sheet line items other than the Debt and Preferred Equity
interest income over the terms of the related investments using the effective interest method. Fees received in connection with
Investments line are also measured at the net amount expected to the be collected.
loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment
to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield
adjustment on the effective interest method based on expected cash flows through the expected maturity date of the related
investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to
recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the
investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral,
we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual
cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, the collection of which is expected, are
also recognized over the term of the loan as an adjustment to yield.
We consider a debt and preferred equity investment to be past due when amounts contractually due have not been paid.
Accrued interest receivable amounts related to these debt and preferred equity investment and other financing receivables
are recorded at the net amount expected to be collected within Other assets in the consolidated balance sheets. Write offs of
accrued interest receivables are recognized as an expense for loan loss and other investment reserves.
Rent Expense
Rent expense is recognized on a straight-line basis over the initial term of the lease. The excess of the rent expense
recognized over the amounts contractually due pursuant to the underlying lease is included in the lease liability - operating
leases on the consolidated balance sheets.
Underwriting Commissions and Costs
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments become 90
Underwriting commissions and costs incurred in connection with our stock offerings are reflected as a reduction of
days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest income
additional paid-in-capital.
recognition is resumed on any debt or preferred equity investment that is on non-accrual status when such debt or preferred
equity investment becomes contractually current and performance is demonstrated to be resumed.
Transaction Costs
We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the
criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of
the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or
premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Debt and Preferred Equity Investments
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC
326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying
value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss
and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts
are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or
acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical
loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data
and external data which may include, among others, governmental economic projections for the New York City Metropolitan
area, public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset
class and adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we
may also use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be
collected for each outcome.
The evaluation of the possible credit deterioration associated with the performance and/or value of the underlying
collateral property as well as the financial and operating capability of the borrower/sponsor requires significant judgment,
which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through
“3,” from lower risk to higher risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 -
Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. Loans with risk ratings of 2 or
above are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our
expectations of current conditions, historical loss information and supportable forecasts described above or whether risk
characteristics specific to the loan warrant the use of a probability-weighted model.
Transaction costs for asset acquisitions are capitalized to the investment basis, which is then subject to a purchase price
allocation based on relative fair value. Transaction costs for business combinations or costs incurred on potential transactions
that are not consummated are expensed as incurred.
Income Taxes
SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal
income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its
stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, SL Green will be
subject to Federal income tax on its taxable income at regular corporate rates. SL Green may also be subject to certain state,
local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on its undistributed taxable
income.
The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the
partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated
statements of operations relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating
Partnership may also be subject to certain state, local and franchise taxes.
We have elected, and may elect in the future, to treat certain of our corporate subsidiaries as taxable REIT subsidiaries, or
TRSs. In general, TRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold
directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in
Federal and state income tax liability for these entities.
During the years ended December 31, 2020, 2019 and 2018, we recorded Federal, state and local tax provisions of $1.2
million, $1.5 million, and $2.8 million, respectively. For the year ended December 31, 2020, the Company paid distributions on
its common stock of $5.54 per share which represented $1.84 per share of ordinary income and $3.06 per share of capital gains.
For the year ended December 31, 2019, the Company paid distributions on its common stock of $3.40 per share which
represented $2.59 per share of ordinary income, and $0.81 per share of capital gains. For the year ended December 31, 2018,
the Company paid distributions on its common stock of $3.25 per share which represented $1.46 per share of ordinary income
and $1.79 per share of capital gains. In order to present information that is consistent with the tax forms issued with respect to
these tax years, these per-share numbers have not been retroactively adjusted to reflect the reverse stock split that was
effectuated in January 2021.
We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise
concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination.
Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a
tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a
substitute for derecognition of tax positions is prohibited.
Stock-Based Employee Compensation Plans
We have a stock-based employee compensation plan, described more fully in Note 14, "Share-based Compensation."
The Company's stock options are recorded at fair value at the time of issuance. Fair value of the stock options is
determined using the Black-Scholes option pricing model. The Black-Scholes model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions including the expected stock price volatility. Because our plan has
characteristics significantly different from those of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in our opinion, the existing models do not necessarily provide a reliable single measure
of the fair value of the employee stock options.
Compensation cost for stock options, if any, is recognized over the vesting period of the award. Our policy is to grant
options with an exercise price equal to the quoted closing market price of the Company's common stock on either the grant date
or the date immediately preceding the grant date. Awards of stock or restricted stock are expensed as compensation over the
benefit period based on the fair value of the stock on the grant date.
For share-based awards with a performance or market measure, we recognize compensation cost over the requisite
service period, using the accelerated attribution expense method. The requisite service period begins on the date the
compensation committee of our board of directors authorizes the award, adopts any relevant performance measures and
communicates the award to the employees. For programs with awards that vest based on the achievement of a performance
condition or market condition, we determine whether it is probable that the performance condition will be met, and estimate
compensation cost based on the fair value of the award at the applicable award date estimated using a binomial model or market
quotes. For share-based awards for which there is no pre-established performance measure, we recognize compensation cost
over the service vesting period, which represents the requisite service period, on a straight-line basis. In accordance with the
provisions of our share-based incentive compensation plans, we accept the return of shares of the Company's common stock, at
the current quoted market price, from certain key employees to satisfy minimum statutory tax-withholding requirements related
to shares that vested during the period.
Awards can also be made in the form of a separate series of units of limited partnership interest in the Operating
Partnership called long-term incentive plan units, or LTIP units. LTIP units, which can be granted either as free-standing
awards or in tandem with other awards under our stock incentive plan, are valued by reference to the value of the Company's
common stock at the time of grant, and are subject to such conditions and restrictions as the compensation committee of the
Company's board of directors may determine, including continued employment or service, computation of financial metrics
and/or achievement of pre-established performance goals and objectives.
Derivative Instruments
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps,
caps, collars and floors, to manage, or hedge, interest rate risk. Effectiveness is essential for those derivatives that we intend to
qualify for hedge accounting. Some derivative instruments are associated with an anticipated transaction. In those cases, hedge
effectiveness criteria also require that it be probable that the underlying transaction occurs. Instruments that meet these hedging
criteria are formally designated as hedges at the inception of the derivative contract.
To determine the fair values of derivative instruments, we use a variety of methods and assumptions that are based on
market conditions and risks existing at each balance sheet date. For the majority of financial instruments including most
derivatives, long-term investments and long-term debt, standard market conventions and techniques such as discounted cash
flow analysis, option pricing models, replacement cost, and termination cost are used to determine fair value. All methods of
assessing fair value result in a general approximation of value, and such value may never actually be realized.
In the normal course of business, we are exposed to the effect of interest rate changes and limit these risks by following
established risk management policies and procedures including the use of derivatives. To address exposure to interest rates,
derivatives are used primarily to fix the rate on debt based on floating-rate indices and manage the cost of borrowing
obligations.
We use a variety of conventional derivative products. These derivatives typically include interest rate swaps, caps, collars
and floors. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading
or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon
their credit ratings and other factors.
We may employ swaps, forwards or purchased options to hedge qualifying forecasted transactions. Gains and losses
related to these transactions are deferred and recognized in net income as interest expense in the same period or periods that the
underlying transaction occurs, expires or is otherwise terminated.
Hedges that are reported at fair value and presented on the balance sheet could be characterized as cash flow hedges or
fair value hedges. Interest rate caps and collars are examples of cash flow hedges. Cash flow hedges address the risk associated
with future cash flows of interest payments. For all hedges held by us that meet the hedging objectives established by our
corporate policy governing interest rate risk management, no net gains or losses were reported in earnings. The changes in fair
value of derivative instruments designated as hedge instruments are reflected in accumulated other comprehensive income
(loss). For derivative instruments not designated as hedging instruments, the gain or loss, resulting from the change in the
estimated fair value of the derivative instruments, is recognized in current earnings during the period of change.
Earnings per Share of the Company
The Company presents both basic and diluted earnings per share ("EPS") using the two-class method, which is an
earnings allocation formula that determines EPS for common stock and any participating securities according to dividends
declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to
common stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes
participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of
common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount.
Diluted EPS also includes units of limited partnership interest. The dilutive effect of stock options is reflected in the weighted
average diluted outstanding shares calculation by application of the treasury stock method. Earnings per share has been
retroactively adjusted to reflect the reverse stock split effectuated in January 2021 for all periods presented in this Annual
Report on Form 10-K.
Earnings per Unit of the Operating Partnership
The Operating Partnership presents both basic and diluted earnings per unit ("EPU") using the two-class method, which is
an earnings allocation formula that determines EPU for common units and any participating securities according to dividends
declared (whether paid or unpaid). Under the two-class method, basic EPU is computed by dividing the income available to
common unitholders by the weighted-average number of common units outstanding for the period. Basic EPU includes
participating securities, consisting of unvested restricted units that receive nonforfeitable dividends similar to shares of common
units. Diluted EPU reflects the potential dilution that could occur if securities or other contracts to issue common units were
exercised or converted into common units, where such exercise or conversion would result in a lower EPU amount. The dilutive
effect of unit options is reflected in the weighted average diluted outstanding units calculation by application of the treasury
stock method. Earnings per unit has been retroactively adjusted for all periods presented in this Annual Report on Form 10-K
to reflect the reverse stock split effectuated in January 2021
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments,
debt and preferred equity investments and accounts receivable. We place our cash investments with high quality financial
institutions. The collateral securing our debt and preferred equity investments is located in New York City. See Note 5, "Debt
and Preferred Equity Investments."
We perform initial and ongoing evaluations of the credit quality of our tenants and require most tenants to provide
security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value
of a tenant's lease obligation, they are a measure of good faith and a potential source of funds to offset the economic costs
associated with lost revenue from the tenant and the costs associated with re-tenanting a space. The properties in our real estate
portfolio are located in the New York metropolitan area. The tenants located in our buildings operate in various industries.
Other than one tenant, Viacom CBS, Inc., who accounted for 5.6% of our share of annualized cash rent, no other tenant in our
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53
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a
tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a
or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon
their credit ratings and other factors.
We may employ swaps, forwards or purchased options to hedge qualifying forecasted transactions. Gains and losses
related to these transactions are deferred and recognized in net income as interest expense in the same period or periods that the
underlying transaction occurs, expires or is otherwise terminated.
Hedges that are reported at fair value and presented on the balance sheet could be characterized as cash flow hedges or
fair value hedges. Interest rate caps and collars are examples of cash flow hedges. Cash flow hedges address the risk associated
with future cash flows of interest payments. For all hedges held by us that meet the hedging objectives established by our
corporate policy governing interest rate risk management, no net gains or losses were reported in earnings. The changes in fair
value of derivative instruments designated as hedge instruments are reflected in accumulated other comprehensive income
(loss). For derivative instruments not designated as hedging instruments, the gain or loss, resulting from the change in the
estimated fair value of the derivative instruments, is recognized in current earnings during the period of change.
Earnings per Share of the Company
The Company presents both basic and diluted earnings per share ("EPS") using the two-class method, which is an
earnings allocation formula that determines EPS for common stock and any participating securities according to dividends
declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to
common stockholders by the weighted-average number of common stock shares outstanding for the period. Basic EPS includes
participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of
common stock. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount.
Diluted EPS also includes units of limited partnership interest. The dilutive effect of stock options is reflected in the weighted
average diluted outstanding shares calculation by application of the treasury stock method. Earnings per share has been
retroactively adjusted to reflect the reverse stock split effectuated in January 2021 for all periods presented in this Annual
Report on Form 10-K.
Earnings per Unit of the Operating Partnership
The Operating Partnership presents both basic and diluted earnings per unit ("EPU") using the two-class method, which is
an earnings allocation formula that determines EPU for common units and any participating securities according to dividends
declared (whether paid or unpaid). Under the two-class method, basic EPU is computed by dividing the income available to
common unitholders by the weighted-average number of common units outstanding for the period. Basic EPU includes
participating securities, consisting of unvested restricted units that receive nonforfeitable dividends similar to shares of common
units. Diluted EPU reflects the potential dilution that could occur if securities or other contracts to issue common units were
exercised or converted into common units, where such exercise or conversion would result in a lower EPU amount. The dilutive
effect of unit options is reflected in the weighted average diluted outstanding units calculation by application of the treasury
stock method. Earnings per unit has been retroactively adjusted for all periods presented in this Annual Report on Form 10-K
to reflect the reverse stock split effectuated in January 2021
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
To determine the fair values of derivative instruments, we use a variety of methods and assumptions that are based on
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments,
debt and preferred equity investments and accounts receivable. We place our cash investments with high quality financial
institutions. The collateral securing our debt and preferred equity investments is located in New York City. See Note 5, "Debt
and Preferred Equity Investments."
We perform initial and ongoing evaluations of the credit quality of our tenants and require most tenants to provide
security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value
of a tenant's lease obligation, they are a measure of good faith and a potential source of funds to offset the economic costs
associated with lost revenue from the tenant and the costs associated with re-tenanting a space. The properties in our real estate
portfolio are located in the New York metropolitan area. The tenants located in our buildings operate in various industries.
Other than one tenant, Viacom CBS, Inc., who accounted for 5.6% of our share of annualized cash rent, no other tenant in our
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53
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substitute for derecognition of tax positions is prohibited.
Stock-Based Employee Compensation Plans
We have a stock-based employee compensation plan, described more fully in Note 14, "Share-based Compensation."
The Company's stock options are recorded at fair value at the time of issuance. Fair value of the stock options is
determined using the Black-Scholes option pricing model. The Black-Scholes model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions including the expected stock price volatility. Because our plan has
characteristics significantly different from those of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in our opinion, the existing models do not necessarily provide a reliable single measure
of the fair value of the employee stock options.
Compensation cost for stock options, if any, is recognized over the vesting period of the award. Our policy is to grant
options with an exercise price equal to the quoted closing market price of the Company's common stock on either the grant date
or the date immediately preceding the grant date. Awards of stock or restricted stock are expensed as compensation over the
benefit period based on the fair value of the stock on the grant date.
For share-based awards with a performance or market measure, we recognize compensation cost over the requisite
service period, using the accelerated attribution expense method. The requisite service period begins on the date the
compensation committee of our board of directors authorizes the award, adopts any relevant performance measures and
communicates the award to the employees. For programs with awards that vest based on the achievement of a performance
condition or market condition, we determine whether it is probable that the performance condition will be met, and estimate
compensation cost based on the fair value of the award at the applicable award date estimated using a binomial model or market
quotes. For share-based awards for which there is no pre-established performance measure, we recognize compensation cost
over the service vesting period, which represents the requisite service period, on a straight-line basis. In accordance with the
provisions of our share-based incentive compensation plans, we accept the return of shares of the Company's common stock, at
the current quoted market price, from certain key employees to satisfy minimum statutory tax-withholding requirements related
to shares that vested during the period.
Awards can also be made in the form of a separate series of units of limited partnership interest in the Operating
Partnership called long-term incentive plan units, or LTIP units. LTIP units, which can be granted either as free-standing
awards or in tandem with other awards under our stock incentive plan, are valued by reference to the value of the Company's
common stock at the time of grant, and are subject to such conditions and restrictions as the compensation committee of the
Company's board of directors may determine, including continued employment or service, computation of financial metrics
and/or achievement of pre-established performance goals and objectives.
Derivative Instruments
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps,
caps, collars and floors, to manage, or hedge, interest rate risk. Effectiveness is essential for those derivatives that we intend to
qualify for hedge accounting. Some derivative instruments are associated with an anticipated transaction. In those cases, hedge
effectiveness criteria also require that it be probable that the underlying transaction occurs. Instruments that meet these hedging
criteria are formally designated as hedges at the inception of the derivative contract.
market conditions and risks existing at each balance sheet date. For the majority of financial instruments including most
derivatives, long-term investments and long-term debt, standard market conventions and techniques such as discounted cash
flow analysis, option pricing models, replacement cost, and termination cost are used to determine fair value. All methods of
assessing fair value result in a general approximation of value, and such value may never actually be realized.
In the normal course of business, we are exposed to the effect of interest rate changes and limit these risks by following
established risk management policies and procedures including the use of derivatives. To address exposure to interest rates,
derivatives are used primarily to fix the rate on debt based on floating-rate indices and manage the cost of borrowing
obligations.
We use a variety of conventional derivative products. These derivatives typically include interest rate swaps, caps, collars
and floors. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of joint venture annualized
cash rent, at December 31, 2020.
For the years ended December 31, 2020, 2019, and 2018, the following properties contributed more than 5.0% of our
annualized cash rent from office properties, including our share of annualized cash rent from joint venture office properties:
Property
2020
Property
2019
Property
11 Madison Avenue
8.2% 1185 Avenue of the Americas
7.6% 11 Madison Avenue
420 Lexington Ave (Graybar)
7.5% 11 Madison Avenue
7.4% 1185 Avenue of the Americas
1185 Avenue of the Americas
6.9% 420 Lexington Avenue
6.6% 420 Lexington Avenue
1515 Broadway
220 East 42nd Street
280 Park Avenue
6.6% 1515 Broadway
6.1% 1515 Broadway
5.9% One Madison Avenue
5.4% 220 East 42nd Street
6.0% One Madison Avenue
5.5%
2018
7.4%
6.7%
6.5%
6.0%
5.8%
As of December 31, 2020, 64.1% of our work force is covered by six collective bargaining agreement. None of these
agreements expire before December 31, 2021. See Note 19, "Benefits Plans."
Reclassification
Certain prior year balances have been reclassified to conform to our current year presentation.
Accounting Standards Updates
In August 2020, the FASB issued Accounting Standard Update, or "ASU", No. 2020-06 Debt - Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). ASU
2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible
debt instruments and convertible preferred stock, removes certain settlement conditions that are required for equity contracts to
qualify for the derivative scope exception and also simplifies the diluted earnings per share calculation in certain areas. ASU
2020-06 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently
evaluating the impact of the adoption of ASU 2020-06 on our consolidated financial statements, but do not believe the adoption
of this standard will have a material impact on our consolidated financial statements.
In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application
of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease
guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new
arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease
concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for
outside the lease modification framework. The Lease Modification Q&A provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. The
Lease Modification Q&A did not have a material impact on the Company’s consolidated financial statements as of and for the
year ended December 31, 2020, however, its future impact to the Company is dependent upon the extent of lease concessions
granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time
of entering into such concessions.
In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (Topic 848) Facilitation of the Effects of
Reference Rate Reform on Financial Reporting and then in January 2021, the FASB issued ASU No 2021-01. The
amendments provide practical expedients for reference rate reform related activities that impact debt, leases, derivatives and
other contracts. The guidance is optional and is effective between March 12, 2020 and December 31, 2022. The guidance may
be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply
the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash
flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding
derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The
Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in
the market occur.
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity
Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) Clarifying the Interactions between Topic
321, Topic 323, and Topic 815. The amendment most relevant to the Company is how to apply the fair value measurement
alternative in Topic 321 when an investor must apply the fair value to an investment under the equity method in Topic 323.
The amendment clarifies that an entity should consider observable transactions when considering the fair value of an
investment. The guidance is effective for the Company for fiscal years beginning after December 15, 2020. Early adoption is
permitted. The Company adopted this guidance on January 1, 2020 and it did not have a material impact on the Company’s
consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other- Internal-Use Software (Topic
350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service
Contract. The amendments provide guidance on accounting for fees paid when the arrangement includes a software license and
align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the
requirements for capitalizing costs to develop or obtain internal-use software. The Company adopted this guidance on January
1, 2020 and it did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework -
Changes to the Disclosure Requirements for Fair Value Measurement. This amendment removed, modified and added the
disclosure requirements under Topic 820. The changes are effective for the Company for fiscal years beginning after December
15, 2019. Early adoption is permitted for the removed or modified disclosures with adoption of the additional disclosures upon
the effective date. The Company adopted this guidance on January 1, 2020 and it did not have a material impact on the
Company’s consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments; in November 2018 issued ASU No. 2018-19, Codification Improvements to Topic 326,
Financial Instruments - Credit Losses, in April, May and November 2019, issued ASU No. 2019-04, 2019-05 and 2019-11,
which provide codification improvements and targeted transition relief; and in 2020 issued ASU 2020-02 Financial
Instruments-Credit Losses (Topic 326) and Leases (Topic 842), which updates SEC guidance in those Topics. The guidance
changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at
fair value through net income. The guidance replaces the current ‘incurred loss’ model with an ‘expected loss’ approach. The
Company’s DPE portfolio and financing lease assets are subject to this guidance. ASU No. 2018-19 excludes operating lease
receivables from the scope of this guidance. The Company adopted this guidance on January 1, 2020 and recorded a
$39.2 million cumulative adjustment to retained earnings upon adoption.
3. Property Acquisitions
2020 Acquisitions
Property
762 Madison Avenue (1)
707 Eleventh Avenue
15 Beekman (2)
590 Fifth Avenue (3)
The following table summarizes the properties acquired during the year ended December 31, 2020:
Acquisition Date
Property Type
January 2020
January 2020
Fee Interest
Fee Interest
January 2020
Leasehold Interest
October 2020
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
6,109
$
159,720
98,412
103,300
29.3
90.0
—
107.2
(1)
(2)
The Company acquired from our joint venture partner the remaining 10% interest in this property that the Company did not already own.
In January 2020, the Company entered into a 99-year ground lease of 126 Nassau Street and subsequently renamed the property 15 Beekman. In August
2020, we entered into a partnership with a real estate fund managed by Meritz Alternative Investment as part of the capitalization of this development
project. See note 6, “Investment in Unconsolidated Joint Ventures.”
(3)
The property previously served as collateral for a debt and preferred equity investment and was acquired through a negotiated transaction with the
sponsor.
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55
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of joint venture annualized
cash rent, at December 31, 2020.
For the years ended December 31, 2020, 2019, and 2018, the following properties contributed more than 5.0% of our
annualized cash rent from office properties, including our share of annualized cash rent from joint venture office properties:
Property
2020
Property
2019
Property
11 Madison Avenue
8.2% 1185 Avenue of the Americas
7.6% 11 Madison Avenue
420 Lexington Ave (Graybar)
7.5% 11 Madison Avenue
7.4% 1185 Avenue of the Americas
1185 Avenue of the Americas
6.9% 420 Lexington Avenue
6.6% 420 Lexington Avenue
1515 Broadway
220 East 42nd Street
280 Park Avenue
6.6% 1515 Broadway
6.1% 1515 Broadway
5.9% One Madison Avenue
5.4% 220 East 42nd Street
6.0% One Madison Avenue
5.5%
2018
7.4%
6.7%
6.5%
6.0%
5.8%
As of December 31, 2020, 64.1% of our work force is covered by six collective bargaining agreement. None of these
agreements expire before December 31, 2021. See Note 19, "Benefits Plans."
Reclassification
Accounting Standards Updates
Certain prior year balances have been reclassified to conform to our current year presentation.
In August 2020, the FASB issued Accounting Standard Update, or "ASU", No. 2020-06 Debt - Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). ASU
2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible
debt instruments and convertible preferred stock, removes certain settlement conditions that are required for equity contracts to
qualify for the derivative scope exception and also simplifies the diluted earnings per share calculation in certain areas. ASU
2020-06 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently
evaluating the impact of the adoption of ASU 2020-06 on our consolidated financial statements, but do not believe the adoption
of this standard will have a material impact on our consolidated financial statements.
In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application
of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease
guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new
arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease
concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for
outside the lease modification framework. The Lease Modification Q&A provides entities with the option to elect to account for
lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available
when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. The
Lease Modification Q&A did not have a material impact on the Company’s consolidated financial statements as of and for the
year ended December 31, 2020, however, its future impact to the Company is dependent upon the extent of lease concessions
granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time
of entering into such concessions.
In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (Topic 848) Facilitation of the Effects of
Reference Rate Reform on Financial Reporting and then in January 2021, the FASB issued ASU No 2021-01. The
amendments provide practical expedients for reference rate reform related activities that impact debt, leases, derivatives and
other contracts. The guidance is optional and is effective between March 12, 2020 and December 31, 2022. The guidance may
be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply
the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash
flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding
derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The
Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in
the market occur.
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity
Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) Clarifying the Interactions between Topic
321, Topic 323, and Topic 815. The amendment most relevant to the Company is how to apply the fair value measurement
alternative in Topic 321 when an investor must apply the fair value to an investment under the equity method in Topic 323.
The amendment clarifies that an entity should consider observable transactions when considering the fair value of an
investment. The guidance is effective for the Company for fiscal years beginning after December 15, 2020. Early adoption is
permitted. The Company adopted this guidance on January 1, 2020 and it did not have a material impact on the Company’s
consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other- Internal-Use Software (Topic
350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service
Contract. The amendments provide guidance on accounting for fees paid when the arrangement includes a software license and
align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the
requirements for capitalizing costs to develop or obtain internal-use software. The Company adopted this guidance on January
1, 2020 and it did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework -
Changes to the Disclosure Requirements for Fair Value Measurement. This amendment removed, modified and added the
disclosure requirements under Topic 820. The changes are effective for the Company for fiscal years beginning after December
15, 2019. Early adoption is permitted for the removed or modified disclosures with adoption of the additional disclosures upon
the effective date. The Company adopted this guidance on January 1, 2020 and it did not have a material impact on the
Company’s consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments; in November 2018 issued ASU No. 2018-19, Codification Improvements to Topic 326,
Financial Instruments - Credit Losses, in April, May and November 2019, issued ASU No. 2019-04, 2019-05 and 2019-11,
which provide codification improvements and targeted transition relief; and in 2020 issued ASU 2020-02 Financial
Instruments-Credit Losses (Topic 326) and Leases (Topic 842), which updates SEC guidance in those Topics. The guidance
changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at
fair value through net income. The guidance replaces the current ‘incurred loss’ model with an ‘expected loss’ approach. The
Company’s DPE portfolio and financing lease assets are subject to this guidance. ASU No. 2018-19 excludes operating lease
receivables from the scope of this guidance. The Company adopted this guidance on January 1, 2020 and recorded a
$39.2 million cumulative adjustment to retained earnings upon adoption.
3. Property Acquisitions
2020 Acquisitions
The following table summarizes the properties acquired during the year ended December 31, 2020:
Property
762 Madison Avenue (1)
707 Eleventh Avenue
15 Beekman (2)
590 Fifth Avenue (3)
Acquisition Date
Property Type
January 2020
January 2020
Fee Interest
Fee Interest
January 2020
Leasehold Interest
October 2020
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
6,109
$
159,720
98,412
103,300
29.3
90.0
—
107.2
(1)
(2)
(3)
The Company acquired from our joint venture partner the remaining 10% interest in this property that the Company did not already own.
In January 2020, the Company entered into a 99-year ground lease of 126 Nassau Street and subsequently renamed the property 15 Beekman. In August
2020, we entered into a partnership with a real estate fund managed by Meritz Alternative Investment as part of the capitalization of this development
project. See note 6, “Investment in Unconsolidated Joint Ventures.”
The property previously served as collateral for a debt and preferred equity investment and was acquired through a negotiated transaction with the
sponsor.
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55
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
2019 Acquisitions
4. Properties Held for Sale and Property Dispositions
The following table summarizes the properties acquired during the year ended December 31, 2019:
Properties Held for Sale
Property
106 Spring Street (1)
410 Tenth Avenue (2)
110 Greene Street (3)
Acquisition Date
Property Type
April 2019
May 2019
May 2019
Fee Interest
Fee Interest
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
5,928
$
638,000
223,600
80.2
440.0
256.5
(1)
(2)
(3)
In April 2019, the Company accepted an assignment of the equity interests in the property in lieu of repayment of the Company's debt investment and
marked the assets received and liabilities assumed to fair value.
In May 2019, the Company closed on the acquisition of a majority and controlling 70.87% interest in 460 West 34th Street and subsequently renamed
the property 410 Tenth Avenue. The Company had previously made a loan to the entity that was accounted for as an Acquisition, Development, and
Construction (“ADC”) arrangement. Upon consolidating the entity in which it acquired the controlling equity interest, the Company and the Partnership
removed the ADC arrangement and recorded the assets and liabilities of the entity at fair value, which resulted in the recognition of a fair value
adjustment of $67.6 million, which was reflected in the Company's consolidated statement of operations within purchase price and other fair value
adjustments, and $18.3 million of net intangible lease liabilities.
In May 2019, the Company acquired from our joint venture partner the remaining 10% interest in this property that the Company did not already own.
2018 Acquisitions
The following table summarizes the properties acquired during the year ended December 31, 2018:
315 West 33rd Street - The Olivia
March 2020
Fee Interest
492,987
Property
2 Herald Square (1)
1231 Third Avenue (2)(3)
Upper East Side Residential (3)(4)
133 Greene Street (2)
712 Madison Avenue (2)
Acquisition Date
Property Type
Approximate
Square Feet
Acquisition
Price
(in millions)
May 2018
July 2018
August 2018
October 2018
December 2018
Leasehold Interest
369,000
$
Fee Interest
Fee Interest
Fee Interest
Fee Interest
39,000
0.2 acres
6,425
6,600
266.0
55.4
30.2
31.0
58.0
(1)
(2)
(3)
(4)
In May 2018, the Company was the successful bidder at the foreclosure of the asset. We recorded the assets acquired and liabilities assumed at fair
value. This resulted in the recognition of a fair value adjustment of $8.1 million, which is reflected in the Company's consolidated statement of
operations within purchase price and other fair value adjustments. See Note 16, "Fair Value Measurements." The Company subsequently sold a 49%
interest in the property in November 2018. See Note 4, "Properties Held for Sale and Dispositions." and Note 6, "Investments in Unconsolidated Joint
Ventures."
The Company accepted an assignment of the equity interests in the property in lieu of repayment of the Company's debt investment, and recorded the
assets received and liabilities assumed at fair value.
This property was subsequently sold in October 2018. See Note 4, "Properties Held for Sale and Dispositions."
In August 2018, the Company acquired the fee interest in three additional land parcels at the Upper East Side Residential Assemblage.
As of December 31, 2020, no properties were classified as held for sale.
Property Dispositions
The following table summarizes the properties sold during the years ended December 31, 2020, 2019, and 2018:
Property
Disposition
Date
Property Type
Unaudited
Approximate
Usable Square
Sales Price (1)
(in millions)
Gain (Loss) on
Sale (2)
(in millions)
30 East 40th Street
December 2020
Leasehold Interest
$
5.2 $
1055 Washington Boulevard
December 2020
Leasehold Interest
Williamsburg Terrace
410 Tenth Avenue
400 East 58th Street
609 Fifth Avenue - Retail
Condominium
Suburban Properties (3)
1640 Flatbush Avenue
562 Fifth Avenue
1010 Washington Boulevard (4)
115 Spring Street (5)
2 Herald Square (6)
December 2020
December 2020
September 2020
Fee Interest
Fee Interest
Fee Interest
May 2020
Fee Interest
December 2019
December 2019
November 2019
August 2019
Fee Interest
Fee Interest
Fee Interest
Fee Interest
November 2018
Office/Retail
December 2019
Fee Interest
1,107,000
400 Summit Lake Drive
November 2018
Land
39.5 acres
Upper East Side Assemblage (7)(8)
October 2018
Development
1-6 International Drive
635 Madison Avenue
115-117 Stevens Avenue
600 Lexington Avenue
July 2018
June 2018
May 2018
January 2018
Office
Retail
Office
Office
Feet
69,446
182,000
52,000
638,000
140,000
21,437
1,000
42,635
143,400
5,218
369,000
70,142
540,000
176,530
178,000
303,515
23.8
32.0
952.5
62.0
168.0
446.5
229.2
16.2
52.4
23.1
66.6
265.0
3.0
143.8
55.0
153.0
12.0
305.0
(1.6)
(11.5)
11.8
56.4
8.3
63.3
71.8
1.8
5.5
(26.6)
(7.1)
3.6
—
(36.2)
(6.3)
(2.6)
(14.1)
(0.7)
23.8
Sales price represents the gross sales price for a property or the gross asset valuation for interests in a property.
The gain on sale is net of $10.5 million, $2.0 million, and $1.3 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2020, 2019, and 2018, respectively. Additionally, amounts do not include adjustments for expenses
recorded in subsequent periods.
Suburban Properties consists of 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive, and 500 Summit Lake Drive.
The Company recorded a $7.1 million charge in 2019 that is included in depreciable real estate reserves and impairments in the consolidated statement
The Company sold a 49% interest, which resulted in the deconsolidation of our remaining 51% interest. We recorded our investment at fair value which
resulted in the recognition of a fair value adjustment of $3.8 million, which is reflected in the Company's consolidated statements of operations within
purchase price and other fair value adjustments. See Note 6, "Investments in Unconsolidated Joint Ventures."
In November 2018, the Company sold a 49% interest in 2 Herald Square to an Israeli institutional investor. See Note 6, "Investments in Unconsolidated
Upper East Side Assemblage consists of 260 East 72nd Street, 31,076 square feet of development rights, 252-254 East 72nd Street, 257 East 71st Street,
259 East 71st Street, and 1231 Third Avenue.
The Company recorded a $5.8 million charge in 2018 that is included in depreciable real estate reserves and impairments in the consolidated statement
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
of operations.
Joint Ventures."
of operations.
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56
57
2019 Acquisitions
Property
106 Spring Street (1)
410 Tenth Avenue (2)
110 Greene Street (3)
(1)
(2)
2018 Acquisitions
Acquisition Date
Property Type
April 2019
May 2019
May 2019
Fee Interest
Fee Interest
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
5,928
$
638,000
223,600
80.2
440.0
256.5
In April 2019, the Company accepted an assignment of the equity interests in the property in lieu of repayment of the Company's debt investment and
marked the assets received and liabilities assumed to fair value.
In May 2019, the Company closed on the acquisition of a majority and controlling 70.87% interest in 460 West 34th Street and subsequently renamed
the property 410 Tenth Avenue. The Company had previously made a loan to the entity that was accounted for as an Acquisition, Development, and
Construction (“ADC”) arrangement. Upon consolidating the entity in which it acquired the controlling equity interest, the Company and the Partnership
removed the ADC arrangement and recorded the assets and liabilities of the entity at fair value, which resulted in the recognition of a fair value
adjustment of $67.6 million, which was reflected in the Company's consolidated statement of operations within purchase price and other fair value
adjustments, and $18.3 million of net intangible lease liabilities.
(3)
In May 2019, the Company acquired from our joint venture partner the remaining 10% interest in this property that the Company did not already own.
The following table summarizes the properties acquired during the year ended December 31, 2018:
Property
2 Herald Square (1)
1231 Third Avenue (2)(3)
Upper East Side Residential (3)(4)
133 Greene Street (2)
712 Madison Avenue (2)
Approximate
Square Feet
Acquisition
Price
(in millions)
Leasehold Interest
369,000
$
Acquisition Date
Property Type
May 2018
July 2018
August 2018
October 2018
December 2018
Fee Interest
Fee Interest
Fee Interest
Fee Interest
39,000
0.2 acres
6,425
6,600
266.0
55.4
30.2
31.0
58.0
(1)
In May 2018, the Company was the successful bidder at the foreclosure of the asset. We recorded the assets acquired and liabilities assumed at fair
value. This resulted in the recognition of a fair value adjustment of $8.1 million, which is reflected in the Company's consolidated statement of
operations within purchase price and other fair value adjustments. See Note 16, "Fair Value Measurements." The Company subsequently sold a 49%
interest in the property in November 2018. See Note 4, "Properties Held for Sale and Dispositions." and Note 6, "Investments in Unconsolidated Joint
Ventures."
(2)
(3)
(4)
The Company accepted an assignment of the equity interests in the property in lieu of repayment of the Company's debt investment, and recorded the
assets received and liabilities assumed at fair value.
This property was subsequently sold in October 2018. See Note 4, "Properties Held for Sale and Dispositions."
In August 2018, the Company acquired the fee interest in three additional land parcels at the Upper East Side Residential Assemblage.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
The following table summarizes the properties acquired during the year ended December 31, 2019:
Properties Held for Sale
4. Properties Held for Sale and Property Dispositions
As of December 31, 2020, no properties were classified as held for sale.
Property Dispositions
The following table summarizes the properties sold during the years ended December 31, 2020, 2019, and 2018:
Property
Disposition
Date
Property Type
30 East 40th Street
December 2020
Leasehold Interest
1055 Washington Boulevard
December 2020
Leasehold Interest
Unaudited
Approximate
Usable Square
Feet
Sales Price (1)
(in millions)
Gain (Loss) on
Sale (2)
(in millions)
December 2020
December 2020
September 2020
Fee Interest
Fee Interest
Fee Interest
May 2020
Fee Interest
69,446
182,000
52,000
638,000
140,000
21,437
March 2020
Fee Interest
492,987
December 2019
Fee Interest
1,107,000
December 2019
December 2019
November 2019
August 2019
Fee Interest
Fee Interest
Fee Interest
Fee Interest
November 2018
Office/Retail
1,000
42,635
143,400
5,218
369,000
November 2018
Land
39.5 acres
October 2018
Development
July 2018
June 2018
May 2018
January 2018
Office
Retail
Office
Office
70,142
540,000
176,530
178,000
303,515
$
5.2 $
23.8
32.0
952.5
62.0
168.0
446.5
229.2
16.2
52.4
23.1
66.6
265.0
3.0
143.8
55.0
153.0
12.0
305.0
(1.6)
(11.5)
11.8
56.4
8.3
63.3
71.8
1.8
5.5
(26.6)
(7.1)
3.6
—
(36.2)
(6.3)
(2.6)
(14.1)
(0.7)
23.8
Williamsburg Terrace
410 Tenth Avenue
400 East 58th Street
609 Fifth Avenue - Retail
Condominium
315 West 33rd Street - The Olivia
Suburban Properties (3)
1640 Flatbush Avenue
562 Fifth Avenue
1010 Washington Boulevard (4)
115 Spring Street (5)
2 Herald Square (6)
400 Summit Lake Drive
Upper East Side Assemblage (7)(8)
1-6 International Drive
635 Madison Avenue
115-117 Stevens Avenue
600 Lexington Avenue
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Sales price represents the gross sales price for a property or the gross asset valuation for interests in a property.
The gain on sale is net of $10.5 million, $2.0 million, and $1.3 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2020, 2019, and 2018, respectively. Additionally, amounts do not include adjustments for expenses
recorded in subsequent periods.
Suburban Properties consists of 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive, and 500 Summit Lake Drive.
The Company recorded a $7.1 million charge in 2019 that is included in depreciable real estate reserves and impairments in the consolidated statement
of operations.
The Company sold a 49% interest, which resulted in the deconsolidation of our remaining 51% interest. We recorded our investment at fair value which
resulted in the recognition of a fair value adjustment of $3.8 million, which is reflected in the Company's consolidated statements of operations within
purchase price and other fair value adjustments. See Note 6, "Investments in Unconsolidated Joint Ventures."
In November 2018, the Company sold a 49% interest in 2 Herald Square to an Israeli institutional investor. See Note 6, "Investments in Unconsolidated
Joint Ventures."
Upper East Side Assemblage consists of 260 East 72nd Street, 31,076 square feet of development rights, 252-254 East 72nd Street, 257 East 71st Street,
259 East 71st Street, and 1231 Third Avenue.
The Company recorded a $5.8 million charge in 2018 that is included in depreciable real estate reserves and impairments in the consolidated statement
of operations.
56
57
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
5. Debt and Preferred Equity Investments
The following table sets forth the net book value of our debt and preferred equity investment portfolio by risk rating as of
Below is a summary of the activity in our debt and preferred equity investments for the twelve months ended December
31, 2020 and 2019 (in thousands):
Balance at beginning of year (1)
Debt investment originations/accretion (2)
Preferred equity investment originations/accretion (2)
Redemptions/sales/syndications/equity ownership/amortization (3)
Net change in loan loss reserves
Balance at end of period (1)
December 31, 2020
December 31, 2019
$
1,580,306 $
2,099,393
389,300
167,042
(1,048,643)
(11,463)
652,866
14,736
(1,190,689)
4,000
$
1,076,542 $
1,580,306
(1)
(2)
(3)
Net of unamortized fees, discounts, and premiums.
Accretion includes amortization of fees and discounts and paid-in-kind investment income.
Certain participations in debt investments that were sold or syndicated, but did not meet the conditions for sale accounting, are included in other assets
and other liabilities on the consolidated balance sheets.
Below is a summary of our debt and preferred equity investments as of December 31, 2020 (dollars in thousands):
December 31, 2020 and 2019 ($ in thousands):
Risk Rating
1 - Low Risk Assets - Low probability of loss
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
December 31, 2020
December 31, 2019
$
$
695,035 $
365,167
16,340
1,180,831
399,475
—
1,076,542 $
1,580,306
The following table sets forth the net book value of our debt and preferred equity investment portfolio by year of
origination and risk rating as of December 31, 2020 ($ in thousands):
Risk Rating
2020(1)
2019(1)
2018(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$
346,320 $
55,318 $
209,941 $
83,456 $
695,035
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
—
—
239,215
—
56,244
—
69,708
16,340
365,167
16,340
$
346,320 $
294,533 $
266,185 $
169,504 $
1,076,542
As of December 31, 2020
(1) Year in which the investment was originated or acquired by us or in which a material modification occurred.
We have determined that we have one portfolio segment of financing receivables at December 31, 2020 and 2019
comprising commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in other assets is an additional amount of financing receivables totaling $66.2 million and $131.1 million at
December 31, 2020 and 2019, respectively, for which the Company recorded adjustments upon adoption of ASC 326 of
$11.4 million and provisions for loan losses of $14.6 million for the twelve months ended December 31, 2020. All of these
loans have a risk rating of 2 and were performing in accordance with their respective terms with the exception of one financing
receivable, which was put on nonaccrual in August 2018, that has a risk rating of 3 and a carrying value at December 31, 2020
Type
Senior Mortgage
Debt
Junior Mortgage
Debt
Carrying
Value
Face
Value
$ 62,751 $ 63,425
7,200 12,000
Mezzanine Debt
275,926 280,119
Interest Rate
L + 2.00 -
3.50%
L + 7.25 -
7.25%
L + 4.95 -
14.07%
$ 1,249 $ 1,250
3.50%
$
64,000 $
— 2021 - 2022
32,888 33,000
6.00%
40,088
127,000
2021
436,742 448,938 2.90 - 14.30%
712,668 4,459,287 2021 - 2029
Total
Carrying
Value
Senior
Financing Maturity(1)
Carrying
Value
Face
Value
Interest Rate
Floating Rate
Fixed Rate
Preferred Equity
Balance at end of
period
—
—
—
259,786 262,254 6.50 - 11.00%
259,786 1,962,750 2022 - 2027
$ 345,877 $ 355,544
$ 730,665 $ 745,442
$ 1,076,542 $ 6,549,037
of $2.5 million.
(1) Excludes available extension options to the extent they have not been exercised as of the date of this filing.
The following table is a rollforward of our total allowance for loan losses for the years ended December 31, 2020, 2019
and 2018 (in thousands):
Balance at beginning of year
Cumulative adjustment upon adoption of ASC 326
Current period provision for loan loss
Write-offs charged against the allowance (1)
Balance at end of period (2)
2020
December 31,
2019
2018
$
1,750 $
5,750 $
27,803
20,693
—
—
(37,033)
(4,000)
$
13,213 $
1,750 $
—
—
6,839
(1,089)
5,750
(1)
(2)
Includes $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2020. These charges are included in
loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations.
As of December 31, 2020, we had recorded an allowance for loan loss on all financing receivables on non-accrual except for one financing receivable
with a carrying value of $225.2 million.
At December 31, 2020, all debt and preferred equity investments were performing in accordance with their respective
terms, with the exception of one investment with a carrying value, net of reserves, of $6.8 million, as discussed in subnote 6 of
the Debt Investments table below. At December 31, 2019, all debt and preferred equity investments were performing in
accordance with their respective terms.
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58
59
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
The following table sets forth the net book value of our debt and preferred equity investment portfolio by risk rating as of
December 31, 2020 and 2019 ($ in thousands):
Risk Rating
1 - Low Risk Assets - Low probability of loss
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
December 31, 2020
December 31, 2019
$
$
695,035 $
365,167
16,340
1,180,831
399,475
—
1,076,542 $
1,580,306
The following table sets forth the net book value of our debt and preferred equity investment portfolio by year of
origination and risk rating as of December 31, 2020 ($ in thousands):
Risk Rating
2020(1)
2019(1)
As of December 31, 2020
2018(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$
346,320 $
55,318 $
209,941 $
83,456 $
695,035
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
—
—
239,215
—
56,244
—
69,708
16,340
365,167
16,340
$
346,320 $
294,533 $
266,185 $
169,504 $
1,076,542
(1) Year in which the investment was originated or acquired by us or in which a material modification occurred.
We have determined that we have one portfolio segment of financing receivables at December 31, 2020 and 2019
comprising commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in other assets is an additional amount of financing receivables totaling $66.2 million and $131.1 million at
December 31, 2020 and 2019, respectively, for which the Company recorded adjustments upon adoption of ASC 326 of
$11.4 million and provisions for loan losses of $14.6 million for the twelve months ended December 31, 2020. All of these
loans have a risk rating of 2 and were performing in accordance with their respective terms with the exception of one financing
receivable, which was put on nonaccrual in August 2018, that has a risk rating of 3 and a carrying value at December 31, 2020
of $2.5 million.
5. Debt and Preferred Equity Investments
31, 2020 and 2019 (in thousands):
Below is a summary of the activity in our debt and preferred equity investments for the twelve months ended December
Balance at beginning of year (1)
Debt investment originations/accretion (2)
Preferred equity investment originations/accretion (2)
Redemptions/sales/syndications/equity ownership/amortization (3)
Net change in loan loss reserves
Balance at end of period (1)
December 31, 2020
December 31, 2019
$
1,580,306 $
2,099,393
389,300
167,042
(1,048,643)
(11,463)
652,866
14,736
(1,190,689)
4,000
$
1,076,542 $
1,580,306
Net of unamortized fees, discounts, and premiums.
Accretion includes amortization of fees and discounts and paid-in-kind investment income.
(1)
(2)
(3)
Certain participations in debt investments that were sold or syndicated, but did not meet the conditions for sale accounting, are included in other assets
and other liabilities on the consolidated balance sheets.
Below is a summary of our debt and preferred equity investments as of December 31, 2020 (dollars in thousands):
Floating Rate
Fixed Rate
Carrying
Value
Face
Value
Interest Rate
Carrying
Value
Face
Value
Interest Rate
Total
Carrying
Value
Senior
Financing Maturity(1)
$ 62,751 $ 63,425
$ 1,249 $ 1,250
3.50%
$
64,000 $
— 2021 - 2022
7,200 12,000
32,888 33,000
6.00%
40,088
127,000
2021
L + 2.00 -
3.50%
L + 7.25 -
7.25%
L + 4.95 -
14.07%
Mezzanine Debt
275,926 280,119
436,742 448,938 2.90 - 14.30%
712,668 4,459,287 2021 - 2029
—
—
—
259,786 262,254 6.50 - 11.00%
259,786 1,962,750 2022 - 2027
$ 345,877 $ 355,544
$ 730,665 $ 745,442
$ 1,076,542 $ 6,549,037
(1) Excludes available extension options to the extent they have not been exercised as of the date of this filing.
The following table is a rollforward of our total allowance for loan losses for the years ended December 31, 2020, 2019
and 2018 (in thousands):
Type
Debt
Debt
Senior Mortgage
Junior Mortgage
Preferred Equity
Balance at end of
period
Balance at beginning of year
Cumulative adjustment upon adoption of ASC 326
Current period provision for loan loss
Write-offs charged against the allowance (1)
Balance at end of period (2)
December 31,
2020
2019
2018
$
1,750 $
5,750 $
27,803
20,693
—
—
(37,033)
(4,000)
$
13,213 $
1,750 $
—
—
6,839
(1,089)
5,750
(1)
(2)
Includes $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2020. These charges are included in
loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations.
As of December 31, 2020, we had recorded an allowance for loan loss on all financing receivables on non-accrual except for one financing receivable
with a carrying value of $225.2 million.
At December 31, 2020, all debt and preferred equity investments were performing in accordance with their respective
terms, with the exception of one investment with a carrying value, net of reserves, of $6.8 million, as discussed in subnote 6 of
the Debt Investments table below. At December 31, 2019, all debt and preferred equity investments were performing in
accordance with their respective terms.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Debt Investments
(7)
In October 2020, the Company accepted a purchase in lieu of repayment and marked the assets received and liabilities assumed to fair value.
As of December 31, 2020 and 2019, we held the following debt investments with an aggregate weighted average current
Preferred Equity Investments
yield of 5.80%, at December 31, 2020 (dollars in thousands):
Loan Type
Fixed Rate Investments:
Junior Mortgage (3b)(4)
Mezzanine Loan
Mortgage/Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (5)
Mezzanine Loan (3a)(6)
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Total fixed rate
Floating Rate Investments:
Mezzanine Loan
Junior Mortgage Participation/
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (3c)
Mortgage and Mezzanine Loan
Mortgage and Mezzanine Loan
Mezzanine Loan
Mortgage and Mezzanine Loan
Junior Mortgage (7)
Mortgage Loan
Mortgage Loan
Mezzanine Loan
Mortgage/Mezzanine Loan
Mortgage/Mezzanine Loan
Total floating rate
Allowance for loan loss
As of December 31, 2020 and 2019, we held the following preferred equity investments with an aggregate weighted
average current yield of 9.96% at December 31, 2020 (dollars in thousands):
December 31,
December 31,
2020
Future Funding
Obligations
2020
Senior
Financing
December 31, 2020
Carrying Value (1)
December 31, 2019
Carrying Value (1)
Mandatory
Redemption (2)
— $
1,712,750 $
154,691 $
98,065
June 2022
—
February 2027
—
— $
— $
— $
250,000
—
105,095
—
1,962,750 $
259,786 $
— $
— $
1,962,750 $
259,786 $
141,171
239,236
(1,750)
240,986
Type
Preferred Equity
Preferred Equity
Preferred Equity (3)
Total Preferred Equity
Allowance for loan loss
$
$
$
$
Total
(1)
(2)
(3)
Carrying value is net of deferred origination fees.
Represents contractual maturity, excluding any unexercised extension options.
In June 2020, we, along with the common member in 885 Third Avenue, amended the partnership documents related to the investment to provide us
with more rights over the management of the underlying property. This resulted in the investment being accounted for using the equity method. See Note
6, "Investments in Unconsolidated Joint Ventures."
6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of December 31, 2020, the book value
of these investments was $3.8 billion, net of investments with negative book values totaling $89.6 million for which we have an
implicit commitment to fund future capital needs.
As of December 31, 2020, 800 Third Avenue, 21 East 66th Street, 605 West 42nd Street, and certain properties within the
Stonehenge Portfolio are VIEs in which we are not the primary beneficiary. As of December 31, 2019, 800 Third Avenue, 21
East 66th Street, 605 West 42nd Street, 333 East 22nd Street, and certain properties within the Stonehenge Portfolio were VIEs
in which we are not the primary beneficiary. Our net equity investment in these VIEs was $134.0 million as of December 31,
2020 and $145.9 million as of December 31, 2019. Our maximum loss is limited to the amount of our equity investment in
these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies". All other investments
below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity
method of accounting.
December 31,
2020
Future Funding
Obligations
December 31,
2020
Senior
Financing
December 31,
2020
Carrying Value (1)
December 31,
2019
Carrying Value (1)
Maturity
Date (2)
$
10,000 $
67,000 $
32,888 $
—
January 2021
—
—
—
—
—
—
—
—
—
—
—
15,000
63,750
280,000
353,772
105,000
95,000
1,712,750
85,000
—
—
—
3,500
56,244
41,057
225,204
13,366
30,000
55,250
20,000
—
—
—
3,500 September 2021
55,573
38,734
215,737
12,950
30,000
55,250
October 2021
August 2022
June 2023
June 2024
January 2025
June 2027
20,000 December 2029
24,952
30,000
12,714
10,000 $
2,777,272 $
477,509 $
499,410
— $
275,000 $
49,956 $
49,809
April 2021
—
7,031
—
—
7,085
44,000
53,845
—
—
—
—
—
—
—
60,000
172,809
61,744
1,115,000
—
—
64,462
—
—
—
—
—
—
—
15,733
35,318
29,106
127,915
60,532
14,011
19,889
—
—
—
—
—
—
—
111,961 $
1,749,015 $
— $
— $
352,460 $
(13,213) $
15,698
41,395
15,743
July 2021
July 2021
July 2021
222,775
March 2022
—
May 2022
13,918 December 2022
May 2023
The table below provides general information on each of our joint ventures as of December 31, 2020:
69,839
35,386
20,000
19,971
106,473
51,387
96,570
82,696
841,660
—
121,961 $
4,526,287 $
816,756 $
1,341,070
$
$
$
$
$
Total
(1)
(2)
(3)
(4)
(5)
(6)
Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
Represents contractual maturity, excluding any unexercised extension options.
Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated
balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $12.0 million, (b) $66.6 million and (c) $0.4 million
In January 2021, this loan was extended six months to July 2021.
This loan was put on non-accrual in July 2020 and remains on non-accrual at December 31, 2020. No investment income has been recognized
subsequent to it being put on non-accrual.
This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual at December 31, 2020. No investment income has been
recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower.
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60
61
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Debt Investments
(7)
In October 2020, the Company accepted a purchase in lieu of repayment and marked the assets received and liabilities assumed to fair value.
As of December 31, 2020 and 2019, we held the following debt investments with an aggregate weighted average current
Preferred Equity Investments
yield of 5.80%, at December 31, 2020 (dollars in thousands):
As of December 31, 2020 and 2019, we held the following preferred equity investments with an aggregate weighted
average current yield of 9.96% at December 31, 2020 (dollars in thousands):
December 31,
2020
Future Funding
Obligations
December 31,
2020
Senior
Financing
December 31, 2020
Carrying Value (1)
December 31, 2019
Carrying Value (1)
Mandatory
Redemption (2)
$
$
$
$
— $
1,712,750 $
154,691 $
98,065
June 2022
—
— $
— $
— $
250,000
—
105,095
—
1,962,750 $
259,786 $
— $
— $
1,962,750 $
259,786 $
—
February 2027
141,171
239,236
(1,750)
240,986
Carrying value is net of deferred origination fees.
Represents contractual maturity, excluding any unexercised extension options.
In June 2020, we, along with the common member in 885 Third Avenue, amended the partnership documents related to the investment to provide us
with more rights over the management of the underlying property. This resulted in the investment being accounted for using the equity method. See Note
6, "Investments in Unconsolidated Joint Ventures."
Type
Preferred Equity
Preferred Equity
Preferred Equity (3)
Total Preferred Equity
Allowance for loan loss
Total
(1)
(2)
(3)
6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of December 31, 2020, the book value
of these investments was $3.8 billion, net of investments with negative book values totaling $89.6 million for which we have an
implicit commitment to fund future capital needs.
As of December 31, 2020, 800 Third Avenue, 21 East 66th Street, 605 West 42nd Street, and certain properties within the
Stonehenge Portfolio are VIEs in which we are not the primary beneficiary. As of December 31, 2019, 800 Third Avenue, 21
East 66th Street, 605 West 42nd Street, 333 East 22nd Street, and certain properties within the Stonehenge Portfolio were VIEs
in which we are not the primary beneficiary. Our net equity investment in these VIEs was $134.0 million as of December 31,
2020 and $145.9 million as of December 31, 2019. Our maximum loss is limited to the amount of our equity investment in
these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies". All other investments
below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity
method of accounting.
The table below provides general information on each of our joint ventures as of December 31, 2020:
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Loan Type
Fixed Rate Investments:
Junior Mortgage (3b)(4)
Mezzanine Loan
Mortgage/Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (5)
Mezzanine Loan (3a)(6)
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Total fixed rate
Floating Rate Investments:
Mezzanine Loan
Junior Mortgage Participation/
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (3c)
Mortgage and Mezzanine Loan
Mortgage and Mezzanine Loan
Mezzanine Loan
Mortgage and Mezzanine Loan
Junior Mortgage (7)
Mortgage Loan
Mortgage Loan
Mezzanine Loan
Mortgage/Mezzanine Loan
Mortgage/Mezzanine Loan
Total floating rate
Allowance for loan loss
$
$
$
$
$
December 31,
December 31,
2020
Future Funding
Obligations
2020
Senior
Financing
December 31,
December 31,
2020
2019
Carrying Value (1)
Carrying Value (1)
Maturity
Date (2)
$
10,000 $
67,000 $
32,888 $
—
January 2021
10,000 $
2,777,272 $
477,509 $
499,410
— $
275,000 $
49,956 $
49,809
April 2021
—
—
—
—
—
—
—
—
—
—
—
—
7,031
—
—
7,085
44,000
53,845
—
—
—
—
—
—
—
15,000
63,750
280,000
353,772
105,000
95,000
1,712,750
85,000
—
—
—
60,000
172,809
61,744
1,115,000
64,462
—
—
—
—
—
—
—
—
—
3,500
56,244
41,057
225,204
13,366
30,000
55,250
20,000
—
—
—
15,733
35,318
29,106
127,915
60,532
14,011
19,889
—
—
—
—
—
—
—
3,500 September 2021
October 2021
August 2022
June 2023
June 2024
January 2025
June 2027
20,000 December 2029
55,573
38,734
215,737
12,950
30,000
55,250
24,952
30,000
12,714
15,698
41,395
15,743
July 2021
July 2021
July 2021
222,775
March 2022
—
May 2022
13,918 December 2022
May 2023
69,839
35,386
20,000
19,971
106,473
51,387
96,570
82,696
841,660
—
111,961 $
1,749,015 $
— $
— $
352,460 $
(13,213) $
121,961 $
4,526,287 $
816,756 $
1,341,070
Total
(1)
(2)
(3)
(4)
(5)
(6)
Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
Represents contractual maturity, excluding any unexercised extension options.
Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated
balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $12.0 million, (b) $66.6 million and (c) $0.4 million
In January 2021, this loan was extended six months to July 2021.
subsequent to it being put on non-accrual.
This loan was put on non-accrual in July 2020 and remains on non-accrual at December 31, 2020. No investment income has been recognized
This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual at December 31, 2020. No investment income has been
recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the years ended
December 31, 2020, 2019, and 2018:
Property
333 East 22nd Street
21 East 66th Street (3)
521 Fifth Avenue
131-137 Spring Street
Stonehenge Portfolio (partial)
3 Columbus Circle
Mezzanine Loan (4)
724 Fifth Avenue
Jericho Plaza
1745 Broadway
175-225 Third Street Brooklyn, New York
1515 Broadway (5)
Stonehenge Portfolio (partial)
Ownership
Interest Sold
Disposition Date
Gross Asset
Valuation
(in thousands) (1)
Gain (Loss)
on Sale
(in thousands) (2)
33.33%
December 2020
$
1,640
$
1 residential unit
December 2019
50.50%
20.00%
Various
48.90%
33.33%
49.90%
11.67%
56.87%
95.00%
13.00%
Various
May 2019
January 2019
Various - 2019
November 2018
August 2018
July 2018
June 2018
May 2018
April 2018
February 2018
Various - 2018
2,900
381,000
216,000
468,800
851,000
15,000
365,000
117,400
633,000
115,000
1,950,000
331,100
2,968
279
57,874
17,660
(2,408)
160,368
N/A
64,587
147
52,038
19,483
—
(6,063)
Represents implied gross valuation for the joint venture or sales price of the property.
Represents the Company's share of the gain or (loss). The gain on sale is net of $0.0 million, $4.0 million, and $11.7 million of employee compensation
accrued in connection with the realization of these investment gains in the years ended December 31, 2020, 2019, and 2018, respectively. Additionally,
gain (loss) amounts do not include adjustments for expenses recorded in subsequent periods.
(3) We, together with our joint venture partner, closed on the sale of one residential unit at the property.
Our investment in a joint venture that owned a mezzanine loan secured by a commercial property in midtown Manhattan was repaid after the joint
venture received repayment of the underlying loan.
Our investment in 1515 Broadway was marked to fair value on January 1, 2018 upon adoption of ASC 610-20.
(1)
(2)
(4)
(5)
Joint Venture Mortgages and Other Loans Payable
We generally finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master
leases for tenant space, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at
December 31, 2020 and 2019, respectively, are as follows (dollars in thousands):
Property
Partner
100 Park Avenue
Prudential Real Estate Investors
717 Fifth Avenue
Wharton Properties/Private Investor
800 Third Avenue
Private Investors
919 Third Avenue
New York State Teacher's Retirement System
11 West 34th Street
Private Investor/Wharton Properties
Canadian Pension Plan Investment Board
Vornado Realty Trust
280 Park Avenue
1552-1560 Broadway (2) Wharton Properties
10 East 53rd Street
21 East 66th Street (3)
650 Fifth Avenue (4)
121 Greene Street
55 West 46th Street (5)
Stonehenge Portfolio
Wharton Properties
Wharton Properties
Private Investors
Various
Prudential Real Estate Investors
Ownership
Interest (1)
49.90%
10.92%
60.52%
51.00%
30.00%
50.00%
50.00%
55.00%
32.28%
50.00%
50.00%
25.00%
Economic
Interest (1)
Unaudited
Approximate
Square Feet
49.90%
10.92%
60.52%
834,000
119,500
526,000
51.00%
1,454,000
30.00%
17,150
50.00%
1,219,158
50.00%
55.00%
32.28%
50.00%
50.00%
25.00%
57,718
354,300
13,069
69,214
7,131
347,000
1,439,016
Various
Various
605 West 42nd Street
The Moinian Group
11 Madison Avenue
400 East 57th Street (6) BlackRock, Inc and Stonehenge Partners
One Vanderbilt
PGIM Real Estate
National Pension Service of Korea/Hines Interest LP
Worldwide Plaza
1515 Broadway
2 Herald Square
RXR Realty / New York REIT / Private Investor
Allianz Real Estate of America
Israeli Institutional Investor
Private Investor
Private Investor
115 Spring Street
885 Third Avenue (7)
15 Beekman (8)
85 Fifth Avenue
One Madison Avenue (9) National Pension Service of Korea/Hines Interest LP
Wells Fargo
A fund managed by Meritz Alternative Investment Management
20.00%
60.00%
51.00%
71.01%
24.35%
56.87%
51.00%
51.00%
(6)
20.00%
36.30%
50.50%
20.00%
927,358
60.00%
2,314,000
41.00%
290,482
71.01%
1,657,198
24.35%
2,048,725
56.87%
1,750,000
51.00%
51.00%
100.00%
20.00%
36.30%
369,000
5,218
625,300
221,884
12,946
50.50%
1,048,700
(1)
(2)
Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2020. Changes in ownership or
economic interests within the current year are disclosed in the notes below.
The acquisition price represents only the purchase of the 1552 Broadway interest which comprised approximately 13,045 square feet. The joint venture
also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(3) We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in three residential units at the property.
(4)
(5)
The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
In February 2021, along with our joint venture partner, we entered into contract to sell the property. This transaction is expected to close in the first
quarter of 2021. If the transaction closes in accordance with the terms of the contract, we expect to recognize a loss on sale of approximately
$17.8 million.
In October 2016, we sold a 49% interest in this property. Our interest in the property was sold within a consolidated joint venture owned 90% by the
Company and 10% by Stonehenge. The transaction resulted in the deconsolidation of the venture's remaining 51% interest in the property. Our joint
venture with Stonehenge remains consolidated resulting in the combined 51% interest being shown within investments in unconsolidated joint ventures
on our balance sheet.
(6)
(7) We hold 100% of the preferred equity interest in the property and believe there is no value to the common equity.
(8)
In August 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company for the building at 126 Nassau
Street. As a result of this transaction, we recognized a gain of $17.7 million, which is included in Gain on sale of real estate, net, in our consolidated
statements of operations. This gain was calculated in accordance with ASC 842, as the Company identified the lease and non-lease components included
in the sublease agreement and allocated the consideration in the agreement to each lease and non-lease component based on each components'
standalone selling price, which was estimated utilizing a combination of the adjusted market assessment and residual approaches as provided for in ASC
606. In the fourth quarter of 2020, the project was renamed 15 Beekman and this name has subsequently been used in all public statements and
marketing materials.
In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the Company no longer retaining a
controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our remaining 50.5% interest. We recorded our investment at fair
value, which resulted in the recognition of a fair value adjustment of $187.5 million. The fair value of our investment was determined by the terms of the
joint venture agreement governing the capitalization of the project. The partners have committed aggregate equity to the project totaling no less than
$492.2 million and their ownership interest in the joint venture is based on their capital contributions, up to an aggregate maximum of 49.5%. At
December 31, 2020, the total of the two partners' ownership interests based on equity contributed was 9.6%.
(9)
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62
63
Property
Partner
100 Park Avenue
Prudential Real Estate Investors
717 Fifth Avenue
Wharton Properties/Private Investor
800 Third Avenue
Private Investors
919 Third Avenue
New York State Teacher's Retirement System
11 West 34th Street
Private Investor/Wharton Properties
280 Park Avenue
Vornado Realty Trust
1552-1560 Broadway (2) Wharton Properties
10 East 53rd Street
Canadian Pension Plan Investment Board
21 East 66th Street (3)
Private Investors
650 Fifth Avenue (4)
Wharton Properties
121 Greene Street
Wharton Properties
55 West 46th Street (5)
Prudential Real Estate Investors
Stonehenge Portfolio
Various
605 West 42nd Street
The Moinian Group
11 Madison Avenue
PGIM Real Estate
400 East 57th Street (6) BlackRock, Inc and Stonehenge Partners
One Vanderbilt
National Pension Service of Korea/Hines Interest LP
Worldwide Plaza
RXR Realty / New York REIT / Private Investor
Allianz Real Estate of America
Israeli Institutional Investor
1515 Broadway
2 Herald Square
115 Spring Street
885 Third Avenue (7)
15 Beekman (8)
85 Fifth Avenue
Private Investor
Private Investor
Wells Fargo
A fund managed by Meritz Alternative Investment Management
Various
Various
49.90%
10.92%
60.52%
51.00%
30.00%
50.00%
50.00%
55.00%
32.28%
50.00%
50.00%
25.00%
20.00%
60.00%
51.00%
71.01%
24.35%
56.87%
51.00%
51.00%
(6)
20.00%
36.30%
50.50%
49.90%
10.92%
60.52%
834,000
119,500
526,000
51.00%
1,454,000
30.00%
17,150
50.00%
1,219,158
50.00%
55.00%
32.28%
50.00%
50.00%
25.00%
57,718
354,300
13,069
69,214
7,131
347,000
1,439,016
20.00%
927,358
60.00%
2,314,000
41.00%
290,482
71.01%
1,657,198
24.35%
2,048,725
56.87%
1,750,000
51.00%
51.00%
100.00%
20.00%
36.30%
369,000
5,218
625,300
221,884
12,946
One Madison Avenue (9) National Pension Service of Korea/Hines Interest LP
50.50%
1,048,700
(1)
(2)
(4)
(5)
Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2020. Changes in ownership or
economic interests within the current year are disclosed in the notes below.
The acquisition price represents only the purchase of the 1552 Broadway interest which comprised approximately 13,045 square feet. The joint venture
also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(3) We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in three residential units at the property.
The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
In February 2021, along with our joint venture partner, we entered into contract to sell the property. This transaction is expected to close in the first
quarter of 2021. If the transaction closes in accordance with the terms of the contract, we expect to recognize a loss on sale of approximately
(6)
In October 2016, we sold a 49% interest in this property. Our interest in the property was sold within a consolidated joint venture owned 90% by the
Company and 10% by Stonehenge. The transaction resulted in the deconsolidation of the venture's remaining 51% interest in the property. Our joint
venture with Stonehenge remains consolidated resulting in the combined 51% interest being shown within investments in unconsolidated joint ventures
$17.8 million.
on our balance sheet.
(7) We hold 100% of the preferred equity interest in the property and believe there is no value to the common equity.
(8)
In August 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company for the building at 126 Nassau
Street. As a result of this transaction, we recognized a gain of $17.7 million, which is included in Gain on sale of real estate, net, in our consolidated
statements of operations. This gain was calculated in accordance with ASC 842, as the Company identified the lease and non-lease components included
in the sublease agreement and allocated the consideration in the agreement to each lease and non-lease component based on each components'
standalone selling price, which was estimated utilizing a combination of the adjusted market assessment and residual approaches as provided for in ASC
606. In the fourth quarter of 2020, the project was renamed 15 Beekman and this name has subsequently been used in all public statements and
marketing materials.
(9)
In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the Company no longer retaining a
controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our remaining 50.5% interest. We recorded our investment at fair
value, which resulted in the recognition of a fair value adjustment of $187.5 million. The fair value of our investment was determined by the terms of the
joint venture agreement governing the capitalization of the project. The partners have committed aggregate equity to the project totaling no less than
$492.2 million and their ownership interest in the joint venture is based on their capital contributions, up to an aggregate maximum of 49.5%. At
December 31, 2020, the total of the two partners' ownership interests based on equity contributed was 9.6%.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Ownership
Interest (1)
Economic
Interest (1)
Unaudited
Approximate
Square Feet
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the years ended
December 31, 2020, 2019, and 2018:
Property
333 East 22nd Street
21 East 66th Street (3)
521 Fifth Avenue
131-137 Spring Street
Stonehenge Portfolio (partial)
3 Columbus Circle
Mezzanine Loan (4)
724 Fifth Avenue
Jericho Plaza
1745 Broadway
175-225 Third Street Brooklyn, New York
1515 Broadway (5)
Stonehenge Portfolio (partial)
Ownership
Interest Sold
Disposition Date
33.33%
December 2020
1 residential unit
December 2019
50.50%
20.00%
Various
48.90%
33.33%
49.90%
11.67%
56.87%
95.00%
13.00%
Various
May 2019
January 2019
Various - 2019
November 2018
August 2018
July 2018
June 2018
May 2018
April 2018
February 2018
Various - 2018
Gross Asset
Valuation
(in thousands) (1)
1,640
$
Gain (Loss)
on Sale
(in thousands) (2)
2,968
$
2,900
381,000
216,000
468,800
851,000
15,000
365,000
117,400
633,000
115,000
1,950,000
331,100
279
57,874
17,660
(2,408)
160,368
N/A
64,587
147
52,038
19,483
—
(6,063)
(1)
(2)
Represents implied gross valuation for the joint venture or sales price of the property.
Represents the Company's share of the gain or (loss). The gain on sale is net of $0.0 million, $4.0 million, and $11.7 million of employee compensation
accrued in connection with the realization of these investment gains in the years ended December 31, 2020, 2019, and 2018, respectively. Additionally,
gain (loss) amounts do not include adjustments for expenses recorded in subsequent periods.
(3) We, together with our joint venture partner, closed on the sale of one residential unit at the property.
(4)
Our investment in a joint venture that owned a mezzanine loan secured by a commercial property in midtown Manhattan was repaid after the joint
venture received repayment of the underlying loan.
Our investment in 1515 Broadway was marked to fair value on January 1, 2018 upon adoption of ASC 610-20.
(5)
Joint Venture Mortgages and Other Loans Payable
We generally finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master
leases for tenant space, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at
December 31, 2020 and 2019, respectively, are as follows (dollars in thousands):
62
63
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Economic
Interest (1)
Initial Maturity
Date
Final Maturity
Date (2)
Interest
Rate (3)
December 31,
2020
December 31,
2019
100.00 %
April 2021
April 2021
3.35% $
272,000 $
10.92 %
10.92 %
50.00 %
50.00 %
32.28 %
51.00 %
56.87 %
July 2022
July 2022
July 2022
July 2022
October 2022
October 2022
October 2022
October 2022
April 2023
June 2023
April 2028
June 2023
March 2025
March 2025
60.00 % September 2025 September 2025
60.52 %
February 2026
February 2026
41.00 % November 2026 November 2026
24.35 % November 2027 November 2027
Various
Various
Various
4.45%
5.50%
4.46%
5.45%
3.60%
5.12%
3.93%
3.84%
3.37%
3.00%
3.98%
3.50%
300,000
355,328
210,000
65,000
12,000
500,000
820,607
—
300,000
355,328
210,000
65,000
12,000
500,000
838,546
1,400,000
1,400,000
177,000
97,024
1,200,000
195,899
177,000
97,735
1,200,000
196,112
$
5,604,858 $
5,351,721
50.00 %
(6)
(6)
L+ 1.50% $
15,000 $
15,000
50.00 % September 2021 September 2024
L+ 1.73%
1,200,000
1,200,000
71.01 % September 2021 September 2023
L+ 2.50%
1,210,329
50.00 %
October 2021
October 2022
L+ 2.65%
51.00 % November 2021 November 2023
L+ 1.45%
30.00 %
25.00 %
January 2022
January 2023
L+ 1.45%
August 2022
August 2024
L+ 1.25%
51.00 % September 2023 September 2023
L+ 3.40%
49.90 % December 2023 December 2025
L+ 2.25%
20.00 %
January 2024
July 2025
L+ 1.50%
55.00 %
February 2025
February 2025
L+ 1.35%
50.50 % November 2025 November 2026
L+ 3.35%
195,000
214,500
23,000
192,524
65,550
360,000
11,212
220,000
—
20.00 %
32.28 %
August 2027
August 2027
L+ 1.44%
550,000
June 2033
June 2033
T+ 2.75%
677
732,928
195,000
190,000
23,000
192,524
65,550
356,972
—
170,000
—
550,000
712
(7)
This loan is a $1.75 billion construction facility with reductions in interest cost based on meeting conditions, the first of which has been satisfied, and
has an initial term of three years with two one year extension options. Advances under the loan are subject to costs incurred. In conjunction with the
loan, we provided partial guarantees for interest and principal payments, the amounts of which are based on certain construction milestones and
operating metrics.
(8)
(9)
This loan has a committed amount of $198.0 million, of which $5.5 million was unfunded as of December 31, 2020. In February 2021, along with our
joint venture partner, we entered into contract to sell the property. This transaction is expected to close in the first quarter of 2021.
This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
(10) The loan is a $1.25 billion construction facility with an initial term of five years with one one year extension option. Advances under the loan are subject
to costs incurred. As of December 31, 2020 no draws have been made under this facility. In conjunction with the loan, we provided partial guarantees for
interest and principal payments, the amounts of which are based on certain construction milestones and operating metrics.
We are entitled to receive fees for providing management, leasing, construction supervision and asset management
services to certain of our joint ventures. We earned $15.8 million, $13.0 million and $14.2 million from these services, net of
our ownership share of the joint ventures, for the years ended December 31, 2020, 2019, and 2018, respectively. In addition, we
have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.
The combined balance sheets for the unconsolidated joint ventures, at December 31, 2020 and 2019, are as follows (in
Tenant and other receivables, related party receivables, and deferred rents receivable
thousands):
Assets (1)
Commercial real estate property, net
Cash and restricted cash
Other assets
Total assets
Liabilities and equity (1)
Mortgages and other loans payable, net
Deferred revenue/gain
Lease liabilities
Other liabilities
Equity
December 31, 2020 December 31, 2019
$
16,143,880 $
14,349,628
18,906,451 $
17,096,311
357,076
403,883
2,001,612
9,749,204 $
1,341,571
1,002,563
464,107
6,349,006
336,189
371,065
2,039,429
8,951,869
1,501,616
897,380
308,304
5,437,142
$
$
$
$
Total liabilities and equity
Company's investments in unconsolidated joint ventures
18,906,451 $
17,096,311
3,823,322 $
2,912,842
(1)
The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling
interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018. In addition, at December 31, 2020, $170.6 million of
net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying
property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having
given rise to the differences.
Property
Fixed Rate Debt:
885 Third Avenue (4)
717 Fifth Avenue (mortgage)
717 Fifth Avenue (mezzanine)
650 Fifth Avenue (mortgage)
650 Fifth Avenue (mezzanine)
21 East 66th Street
919 Third Avenue
1515 Broadway
11 Madison Avenue
800 Third Avenue
400 East 57th Street
Worldwide Plaza
Stonehenge Portfolio (5)
Total fixed rate debt
Floating Rate Debt:
121 Greene Street
280 Park Avenue
One Vanderbilt (7)
1552 Broadway
2 Herald Square
11 West 34th Street
55 West 46th Street (8)
115 Spring Street
100 Park Avenue
15 Beekman (9)
10 East 53rd Street
One Madison Avenue (10)
605 West 42nd Street
21 East 66th Street
Total floating rate debt
Total joint venture mortgages and other loans
payable
Deferred financing costs, net
Total joint venture mortgages and other loans
payable, net
$
$
4,257,792 $
3,691,686
9,862,650 $
9,043,407
(113,446)
(91,538)
$
9,749,204 $
8,951,869
(1)
(2)
(3)
(4)
(5)
(6)
Economic interest represents the Company's interests in the joint venture as of December 31, 2020. Changes in ownership or economic interests, if any,
within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above.
Reflects exercise of all available options. The ability to exercise extension options may be subject to certain tests based on the operating performance of
the property.
Interest rates as of December 31, 2020, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated
spread over the 30-day LIBOR ("L") or 1-year Treasury ("T").
The Company holds 100% of the preferred equity interest in the property and believes that there is no value to the common equity.
Comprised of three mortgages totaling $132.4 million that mature in April 2028 and two mortgages totaling $63.5 million that mature in July 2029.
This loan matured in November 2020. The Company is in discussions with the lender on resolution.
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64
65
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
(7)
(8)
(9)
(10) The loan is a $1.25 billion construction facility with an initial term of five years with one one year extension option. Advances under the loan are subject
to costs incurred. As of December 31, 2020 no draws have been made under this facility. In conjunction with the loan, we provided partial guarantees for
interest and principal payments, the amounts of which are based on certain construction milestones and operating metrics.
This loan is a $1.75 billion construction facility with reductions in interest cost based on meeting conditions, the first of which has been satisfied, and
has an initial term of three years with two one year extension options. Advances under the loan are subject to costs incurred. In conjunction with the
loan, we provided partial guarantees for interest and principal payments, the amounts of which are based on certain construction milestones and
operating metrics.
This loan has a committed amount of $198.0 million, of which $5.5 million was unfunded as of December 31, 2020. In February 2021, along with our
joint venture partner, we entered into contract to sell the property. This transaction is expected to close in the first quarter of 2021.
This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
Property
Fixed Rate Debt:
885 Third Avenue (4)
717 Fifth Avenue (mortgage)
717 Fifth Avenue (mezzanine)
650 Fifth Avenue (mortgage)
650 Fifth Avenue (mezzanine)
21 East 66th Street
919 Third Avenue
1515 Broadway
11 Madison Avenue
800 Third Avenue
400 East 57th Street
Worldwide Plaza
Stonehenge Portfolio (5)
Total fixed rate debt
Floating Rate Debt:
121 Greene Street
280 Park Avenue
One Vanderbilt (7)
1552 Broadway
2 Herald Square
11 West 34th Street
55 West 46th Street (8)
115 Spring Street
100 Park Avenue
15 Beekman (9)
10 East 53rd Street
One Madison Avenue (10)
605 West 42nd Street
21 East 66th Street
Total floating rate debt
Economic
Interest (1)
Initial Maturity
Final Maturity
Date
Date (2)
Interest
Rate (3)
December 31,
December 31,
2020
2019
100.00 %
April 2021
April 2021
3.35% $
272,000 $
10.92 %
10.92 %
50.00 %
50.00 %
32.28 %
51.00 %
56.87 %
July 2022
July 2022
July 2022
July 2022
October 2022
October 2022
October 2022
October 2022
April 2023
June 2023
April 2028
June 2023
March 2025
March 2025
60.52 %
February 2026
February 2026
41.00 % November 2026 November 2026
24.35 % November 2027 November 2027
Various
Various
Various
4.45%
5.50%
4.46%
5.45%
3.60%
5.12%
3.93%
3.84%
3.37%
3.00%
3.98%
3.50%
300,000
355,328
210,000
65,000
12,000
500,000
820,607
177,000
97,024
1,200,000
195,899
60.00 % September 2025 September 2025
1,400,000
1,400,000
$
5,604,858 $
5,351,721
50.00 %
(6)
(6)
L+ 1.50% $
15,000 $
15,000
50.00 % September 2021 September 2024
L+ 1.73%
1,200,000
1,200,000
71.01 % September 2021 September 2023
L+ 2.50%
1,210,329
50.00 %
October 2021
October 2022
L+ 2.65%
51.00 % November 2021 November 2023
L+ 1.45%
30.00 %
25.00 %
January 2022
January 2023
L+ 1.45%
August 2022
August 2024
L+ 1.25%
51.00 % September 2023 September 2023
L+ 3.40%
49.90 % December 2023 December 2025
L+ 2.25%
20.00 %
January 2024
July 2025
L+ 1.50%
55.00 %
February 2025
February 2025
L+ 1.35%
50.50 % November 2025 November 2026
L+ 3.35%
195,000
214,500
23,000
192,524
65,550
360,000
11,212
220,000
—
20.00 %
32.28 %
August 2027
August 2027
L+ 1.44%
550,000
June 2033
June 2033
T+ 2.75%
677
—
300,000
355,328
210,000
65,000
12,000
500,000
838,546
177,000
97,735
1,200,000
196,112
732,928
195,000
190,000
23,000
192,524
65,550
356,972
170,000
—
—
550,000
712
Total joint venture mortgages and other loans
payable
Deferred financing costs, net
Total joint venture mortgages and other loans
payable, net
$
$
4,257,792 $
3,691,686
9,862,650 $
9,043,407
(113,446)
(91,538)
$
9,749,204 $
8,951,869
the property.
(1)
(2)
(3)
(4)
(5)
(6)
Economic interest represents the Company's interests in the joint venture as of December 31, 2020. Changes in ownership or economic interests, if any,
within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above.
Reflects exercise of all available options. The ability to exercise extension options may be subject to certain tests based on the operating performance of
Interest rates as of December 31, 2020, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated
spread over the 30-day LIBOR ("L") or 1-year Treasury ("T").
The Company holds 100% of the preferred equity interest in the property and believes that there is no value to the common equity.
Comprised of three mortgages totaling $132.4 million that mature in April 2028 and two mortgages totaling $63.5 million that mature in July 2029.
This loan matured in November 2020. The Company is in discussions with the lender on resolution.
We are entitled to receive fees for providing management, leasing, construction supervision and asset management
services to certain of our joint ventures. We earned $15.8 million, $13.0 million and $14.2 million from these services, net of
our ownership share of the joint ventures, for the years ended December 31, 2020, 2019, and 2018, respectively. In addition, we
have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.
The combined balance sheets for the unconsolidated joint ventures, at December 31, 2020 and 2019, are as follows (in
thousands):
Assets (1)
Commercial real estate property, net
Cash and restricted cash
Tenant and other receivables, related party receivables, and deferred rents receivable
Other assets
Total assets
Liabilities and equity (1)
Mortgages and other loans payable, net
Deferred revenue/gain
Lease liabilities
Other liabilities
Equity
Total liabilities and equity
Company's investments in unconsolidated joint ventures
December 31, 2020 December 31, 2019
$
16,143,880 $
14,349,628
357,076
403,883
2,001,612
336,189
371,065
2,039,429
18,906,451 $
17,096,311
9,749,204 $
1,341,571
1,002,563
464,107
6,349,006
8,951,869
1,501,616
897,380
308,304
5,437,142
18,906,451 $
17,096,311
3,823,322 $
2,912,842
$
$
$
$
(1)
The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling
interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018. In addition, at December 31, 2020, $170.6 million of
net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying
property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having
given rise to the differences.
64
65
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years
8. Mortgages and Other Loans Payable
ended December 31, 2020, 2019, and 2018 are as follows (unaudited, in thousands):
Total revenues
Operating expenses
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Transaction related costs
Depreciation and amortization
Total expenses
Loss on early extinguishment of debt
Net loss before gain on sale (1)
Company's equity in net loss income from unconsolidated joint ventures (1)
Year Ended December 31,
2020
2019
2018
$
1,133,217 $
1,163,534 $
1,244,804
180,201
220,633
24,134
325,500
20,427
—
407,834
202,881
212,355
24,816
372,408
19,336
—
407,697
219,440
226,961
18,697
363,055
21,634
—
421,458
$
$
$
1,178,729 $
1,239,493 $
1,271,245
(194)
(45,706) $
(25,195) $
(1,031)
(76,990) $
(34,518) $
—
(26,441)
7,311
(1)
The combined statements of operations and the Company's equity in net (loss) income for the unconsolidated joint ventures reflects the effect of step ups
in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.
7. Deferred Costs
Deferred costs at December 31, 2020 and 2019 consisted of the following (in thousands):
Deferred leasing costs
Less: accumulated amortization
Deferred costs, net
December 31,
2020
2019
$
$
447,002 $
(269,834)
177,168 $
466,136
(260,853)
205,283
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt
investments at December 31, 2020 and 2019, respectively, were as follows (dollars in thousands):
Initial Maturity
Final Maturity
Date
Date (1)
Interest
Rate (2)
December 31, 2020 December 31, 2019
Property
Fixed Rate Debt:
100 Church Street
420 Lexington Avenue
Landmark Square
485 Lexington Avenue
1080 Amsterdam (3)
400 East 58th Street
762 Madison Avenue (4)
315 West 33rd Street (5)
Total fixed rate debt
Floating Rate Debt:
133 Greene Street
106 Spring Street
FHLB Facility (8)
FHLB Facility (8)
FHLB Facility (8)
609 Fifth Avenue
185 Broadway (9)
712 Madison Avenue
220 East 42nd Street
719 Seventh Avenue
FHLB Facility
FHLB Facility
FHLB Facility
410 Tenth Avenue
Total floating rate debt
2017 Master Repurchase Agreement (10)
July 2022
July 2022
4.68% $
204,875 $
October 2024
October 2040
January 2027
January 2027
February 2027
February 2027
February 2027
February 2027
3.99%
4.90%
4.25%
3.59%
$
1,083,683 $
1,383,449
(6)
(7)
(6) L+ 2.00% $
15,523 $
(7) L+ 2.50%
January 2021
January 2021 L+ 0.28%
January 2021
January 2021 L+ 0.23%
January 2021
January 2021 L+ 0.18%
March 2021
March 2024 L+ 2.40%
November 2021 November 2023 L+ 2.85%
December 2021 December 2022 L+ 1.85%
June 2023
June 2025 L+ 2.75%
September 2023 September 2023 L+ 1.20%
294,035
100,000
450,000
34,773
—
—
38,025
10,000
15,000
35,000
57,651
158,478
28,000
510,000
50,000
—
—
—
—
—
209,296
299,165
100,000
450,000
35,123
39,094
771
250,000
15,523
38,025
—
—
—
53,773
120,110
28,000
—
50,000
152,684
10,000
15,000
14,500
330,819
828,434
Total mortgages and other loans payable
Deferred financing costs, net of amortization
Total mortgages and other loans payable, net
$
$
$
917,677 $
2,001,360 $
2,211,883
(21,388)
(28,630)
1,979,972 $
2,183,253
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Reflects exercise of all available options. The ability to exercise extension options may be subject to certain tests based on the operating performance of
the property.
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated
spread over the 30-day LIBOR, unless otherwise specified.
The loan is comprised of a $33.9 million mortgage loan and $0.9 million mezzanine loan with a fixed interest rate of 350 basis points and 700 basis
points, respectively, for the first five years and is prepayable without penalty at the end of the fifth year.
In January 2020, the Company closed on the acquisition of the remaining 10% interest in this property from our joint venture partner. As part of this
transaction, the loan was repaid.
In March 2020, the loan was assumed by the buyer in connection with the sale of the property.
In February 2021, this debt was extinguished after the lender was the winning bidder in a foreclosure auction for the property.
This loan matured in January 2021. The Company is in discussions with the lender on resolution.
In January 2021, these loans were extended one month from their respective maturity dates to February 2021 without penalty. The interest rate for the
extension period was a fixed rate of 39 basis points. In February 2021, all advances were repaid.
This loan is a $225.0 million construction facility, with reductions in interest cost based on meeting certain conditions, and has an initial three year term
with two one year extension options. Advances under the loan are subject to incurred costs and funded equity requirements.
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66
67
Total revenues
Operating expenses
Real estate taxes
Operating lease rent
Interest expense, net of interest income
Amortization of deferred financing costs
Transaction related costs
Depreciation and amortization
Total expenses
Loss on early extinguishment of debt
Net loss before gain on sale (1)
Year Ended December 31,
2020
2019
2018
$
1,133,217 $
1,163,534 $
1,244,804
180,201
220,633
24,134
325,500
20,427
—
407,834
202,881
212,355
24,816
372,408
19,336
—
407,697
219,440
226,961
18,697
363,055
21,634
—
421,458
—
(26,441)
7,311
1,178,729 $
1,239,493 $
1,271,245
$
$
$
(194)
(45,706) $
(25,195) $
(1,031)
(76,990) $
(34,518) $
Company's equity in net loss income from unconsolidated joint ventures (1)
(1)
The combined statements of operations and the Company's equity in net (loss) income for the unconsolidated joint ventures reflects the effect of step ups
in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.
7. Deferred Costs
Deferred costs at December 31, 2020 and 2019 consisted of the following (in thousands):
Deferred leasing costs
Less: accumulated amortization
Deferred costs, net
December 31,
2020
2019
$
$
447,002 $
(269,834)
177,168 $
466,136
(260,853)
205,283
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years
8. Mortgages and Other Loans Payable
ended December 31, 2020, 2019, and 2018 are as follows (unaudited, in thousands):
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt
investments at December 31, 2020 and 2019, respectively, were as follows (dollars in thousands):
Property
Fixed Rate Debt:
100 Church Street
420 Lexington Avenue
Landmark Square
485 Lexington Avenue
1080 Amsterdam (3)
400 East 58th Street
762 Madison Avenue (4)
315 West 33rd Street (5)
Total fixed rate debt
Floating Rate Debt:
133 Greene Street
106 Spring Street
FHLB Facility (8)
FHLB Facility (8)
FHLB Facility (8)
609 Fifth Avenue
185 Broadway (9)
712 Madison Avenue
220 East 42nd Street
719 Seventh Avenue
2017 Master Repurchase Agreement (10)
FHLB Facility
FHLB Facility
FHLB Facility
410 Tenth Avenue
Total floating rate debt
Total mortgages and other loans payable
Deferred financing costs, net of amortization
Total mortgages and other loans payable, net
Initial Maturity
Date
Final Maturity
Date (1)
Interest
Rate (2)
December 31, 2020 December 31, 2019
July 2022
July 2022
4.68% $
204,875 $
October 2024
October 2040
January 2027
January 2027
February 2027
February 2027
February 2027
February 2027
3.99%
4.90%
4.25%
3.59%
294,035
100,000
450,000
34,773
—
—
209,296
299,165
100,000
450,000
35,123
39,094
771
250,000
$
1,083,683 $
1,383,449
(6)
(7)
(6) L+ 2.00% $
15,523 $
(7) L+ 2.50%
January 2021
January 2021 L+ 0.28%
January 2021
January 2021 L+ 0.23%
January 2021
January 2021 L+ 0.18%
March 2021
March 2024 L+ 2.40%
November 2021 November 2023 L+ 2.85%
December 2021 December 2022 L+ 1.85%
June 2023
June 2025 L+ 2.75%
September 2023 September 2023 L+ 1.20%
$
$
$
38,025
10,000
15,000
35,000
57,651
158,478
28,000
510,000
50,000
—
—
—
—
—
917,677 $
15,523
38,025
—
—
—
53,773
120,110
28,000
—
50,000
152,684
10,000
15,000
14,500
330,819
828,434
2,001,360 $
2,211,883
(21,388)
(28,630)
1,979,972 $
2,183,253
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Reflects exercise of all available options. The ability to exercise extension options may be subject to certain tests based on the operating performance of
the property.
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated
spread over the 30-day LIBOR, unless otherwise specified.
The loan is comprised of a $33.9 million mortgage loan and $0.9 million mezzanine loan with a fixed interest rate of 350 basis points and 700 basis
points, respectively, for the first five years and is prepayable without penalty at the end of the fifth year.
In January 2020, the Company closed on the acquisition of the remaining 10% interest in this property from our joint venture partner. As part of this
transaction, the loan was repaid.
In March 2020, the loan was assumed by the buyer in connection with the sale of the property.
In February 2021, this debt was extinguished after the lender was the winning bidder in a foreclosure auction for the property.
This loan matured in January 2021. The Company is in discussions with the lender on resolution.
In January 2021, these loans were extended one month from their respective maturity dates to February 2021 without penalty. The interest rate for the
extension period was a fixed rate of 39 basis points. In February 2021, all advances were repaid.
This loan is a $225.0 million construction facility, with reductions in interest cost based on meeting certain conditions, and has an initial three year term
with two one year extension options. Advances under the loan are subject to incurred costs and funded equity requirements.
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67
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
(10)
In June 2020, we exercised a one year extension option which extended the maturity date to June 2021. At December 31, 2020, there was no outstanding
balance on the $400.0 million facility.
At December 31, 2020 and 2019, the gross book value of the properties and debt and preferred equity investments
collateralizing the mortgages and other loans payable was approximately $2.5 billion and $3.3 billion, respectively.
Federal Home Loan Bank of New York ("FHLB") Facility
As of December 31, 2020, the Company’s wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a
Vermont licensed captive insurance company, was a member of the Federal Home Loan Bank of New York, or FHLBNY. As a
member, Ticonderoga was able to borrow funds from the FHLBNY in the form of secured advances that bore interest at a
floating rate. In February 2021, Ticonderoga's membership in FHLB New York was terminated and all advances were repaid.
As of December 31, 2020, Ticonderoga had a total of $60.0 million in outstanding secured advances with an average spread of
21 basis points over 30-day LIBOR.
Master Repurchase Agreement
The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early
repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit
valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit
risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in
contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with
potential margin calls is further mitigated by our ability to collateralize the facility with additional assets from our portfolio of
debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity. As of
December 31, 2020, there have been no margin calls on the 2017 MRA.
In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bears
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate and is scheduled
to mature in June 2021, with a one-year extension option. At December 31, 2020, the facility had no outstanding balance.
9. Corporate Indebtedness
2017 Credit Facility
In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was
originally entered into by the Company in November 2012, or the 2012 credit facility. As of December 31, 2020, the 2017
credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0
million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024,
respectively. The revolving credit facility has two 6-month as-of-right extension options to March 31, 2023. We also have an
option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the
maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional
commitments from our existing lenders and other financial institutions.
As of December 31, 2020, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5
basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans
under Term Loan A, and (iii) 85 basis points to 165 basis points for loans under Term Loan B, in each case based on the credit
rating assigned to the senior unsecured long term indebtedness of the Company. In instances where there are either only two
ratings available or where there are more than two and the difference between them is one rating category, the applicable rating
shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the
lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the
average is not a recognized category.
At December 31, 2020, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for
Term Loan A, and 100 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility
fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long
term indebtedness of the Company. As of December 31, 2020, the facility fee was 20 basis points.
As of December 31, 2020, we had $26.0 million of outstanding letters of credit, $110.0 million drawn under the revolving
credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.4 billion under the
2017 credit facility. At December 31, 2020 and December 31, 2019, the revolving credit facility had a carrying value of $105.3
million and $234.0 million, respectively, net of deferred financing costs. At December 31, 2020 and December 31, 2019, the
term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility.
The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2020 and 2019,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
August 7, 2018 (2)(3)
October 5, 2017 (2)
November 15, 2012 (4)
December 17, 2015 (5)
March 16, 2010 (6)
December
31,
2020
Unpaid
Principal
Balance
December
December
31,
2020
Accreted
Balance
31,
2019
Accreted
Balance
$
350,000 $
350,000 $
350,000
500,000
300,000
100,000
—
499,803
302,086
100,000
—
499,695
303,142
100,000
250,000
$ 1,250,000 $ 1,251,889 $ 1,502,837
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
1.52 %
3.25 %
4.50 %
4.27 %
3
5
August 2021
October 2022
10 December 2022
10 December 2025
Deferred financing costs, net
(3,670)
(5,990)
$ 1,250,000 $ 1,248,219 $ 1,496,847
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
The notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the
notes, plus unpaid accrued interest thereon to the redemption date. In April 2020, the Company entered into $350.0 million of fixed rate interest swaps at
In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $100.0 million of 4.50% senior unsecured notes due
(1)
(2)
(3)
(4)
(5)
(6)
a rate of 0.54375% through August 2021.
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
In March 2020, the notes were repaid.
Restrictive Covenants
The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants
which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional
indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with
financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed
charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to
unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default
is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to
continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2020 and 2019, we were in compliance
with all such covenants.
Junior Subordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities
through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating
Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR.
Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its
right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole
or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are
not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance
sheets and the related payments are classified as interest expense.
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69
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
(10)
In June 2020, we exercised a one year extension option which extended the maturity date to June 2021. At December 31, 2020, there was no outstanding
balance on the $400.0 million facility.
At December 31, 2020 and 2019, the gross book value of the properties and debt and preferred equity investments
collateralizing the mortgages and other loans payable was approximately $2.5 billion and $3.3 billion, respectively.
Federal Home Loan Bank of New York ("FHLB") Facility
As of December 31, 2020, the Company’s wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a
Vermont licensed captive insurance company, was a member of the Federal Home Loan Bank of New York, or FHLBNY. As a
member, Ticonderoga was able to borrow funds from the FHLBNY in the form of secured advances that bore interest at a
floating rate. In February 2021, Ticonderoga's membership in FHLB New York was terminated and all advances were repaid.
As of December 31, 2020, Ticonderoga had a total of $60.0 million in outstanding secured advances with an average spread of
21 basis points over 30-day LIBOR.
Master Repurchase Agreement
The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early
repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit
valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit
risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in
contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with
potential margin calls is further mitigated by our ability to collateralize the facility with additional assets from our portfolio of
debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity. As of
December 31, 2020, there have been no margin calls on the 2017 MRA.
In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bears
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate and is scheduled
to mature in June 2021, with a one-year extension option. At December 31, 2020, the facility had no outstanding balance.
9. Corporate Indebtedness
2017 Credit Facility
In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was
originally entered into by the Company in November 2012, or the 2012 credit facility. As of December 31, 2020, the 2017
credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0
million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024,
respectively. The revolving credit facility has two 6-month as-of-right extension options to March 31, 2023. We also have an
option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the
maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional
commitments from our existing lenders and other financial institutions.
As of December 31, 2020, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5
basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans
under Term Loan A, and (iii) 85 basis points to 165 basis points for loans under Term Loan B, in each case based on the credit
rating assigned to the senior unsecured long term indebtedness of the Company. In instances where there are either only two
ratings available or where there are more than two and the difference between them is one rating category, the applicable rating
shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the
lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the
average is not a recognized category.
At December 31, 2020, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for
Term Loan A, and 100 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility
fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long
term indebtedness of the Company. As of December 31, 2020, the facility fee was 20 basis points.
As of December 31, 2020, we had $26.0 million of outstanding letters of credit, $110.0 million drawn under the revolving
credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.4 billion under the
2017 credit facility. At December 31, 2020 and December 31, 2019, the revolving credit facility had a carrying value of $105.3
million and $234.0 million, respectively, net of deferred financing costs. At December 31, 2020 and December 31, 2019, the
term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility.
The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2020 and 2019,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
August 7, 2018 (2)(3)
October 5, 2017 (2)
November 15, 2012 (4)
December 17, 2015 (5)
March 16, 2010 (6)
December
31,
2020
Unpaid
Principal
Balance
December
31,
2020
Accreted
Balance
December
31,
2019
Accreted
Balance
$
350,000 $
350,000 $
350,000
500,000
300,000
100,000
—
499,803
302,086
100,000
—
499,695
303,142
100,000
250,000
$ 1,250,000 $ 1,251,889 $ 1,502,837
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
1.52 %
3.25 %
4.50 %
4.27 %
3
5
August 2021
October 2022
10 December 2022
10 December 2025
Deferred financing costs, net
(3,670)
(5,990)
$ 1,250,000 $ 1,248,219 $ 1,496,847
(1)
(2)
(3)
(4)
(5)
(6)
Interest rate as of December 31, 2020, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
The notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the
notes, plus unpaid accrued interest thereon to the redemption date. In April 2020, the Company entered into $350.0 million of fixed rate interest swaps at
a rate of 0.54375% through August 2021.
In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $100.0 million of 4.50% senior unsecured notes due
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
In March 2020, the notes were repaid.
Restrictive Covenants
The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants
which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional
indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with
financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed
charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to
unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default
is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to
continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2020 and 2019, we were in compliance
with all such covenants.
Junior Subordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities
through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating
Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR.
Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its
right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole
or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are
not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance
sheets and the related payments are classified as interest expense.
68
69
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Principal Maturities
One Vanderbilt Investment
Combined aggregate principal maturities of mortgages and other loans payable, the 2017 credit facility, trust preferred
securities, senior unsecured notes and our share of joint venture debt as of December 31, 2020, including as-of-right extension
options, were as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Scheduled
Amortization
Principal
Revolving
Credit
Facility
Unsecured
Term Loans
Trust
Preferred
Securities
Senior
Unsecured
Notes
Total
Joint
Venture
Debt
$
10,700 $ 300,027 $
— $
— $
— $ 350,000 $ 660,727 $ 1,085,279
8,767
6,599
5,285
829
930
255,435
560,000
272,749
—
580,039
—
—
110,000
1,300,000
—
—
—
200,000
—
—
—
—
—
—
800,000
1,064,202
—
—
1,976,599
478,034
540,947
491,066
617,010
100,000
100,829
1,385,256
100,000
—
680,969
552,813
$
33,110 $ 1,968,250 $ 110,000 $ 1,500,000 $ 100,000 $ 1,250,000 $ 4,961,360 $ 4,672,371
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
Interest expense before capitalized interest
Interest on financing leases
Interest capitalized
Interest income
Interest expense, net
Year Ended December 31,
2019
2018
2020
$
185,934 $
246,848 $
236,719
8,091
(75,167)
(2,179)
3,243
(55,446)
(4,124)
8,069
(34,162)
(1,957)
$
116,679 $
190,521 $
208,669
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates are partially owned by Gary Green, a son of Stephen L. Green,
who serves as a member and as the chairman emeritus of our board of directors, and provide services to certain properties
owned by us. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star
Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services,
respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual
tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service
Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain
threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease
agreements.
Income earned from the profit participation, which is included in other income on the consolidated statements of
operations, was $1.4 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018,
respectively.
We also recorded expenses, inclusive of capitalized expenses, of $13.3 million, $18.8 million and $18.8 million for the
years ended December 31, 2020, 2019 and 2018, respectively, for these services (excluding services provided directly to
tenants).
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.6 million and $0.6 million for the
years ended December 31, 2020, 2019, and 2018 respectively.
In December 2016, we entered into agreements with entities owned and controlled by our Chairman and CEO, Marc
Holliday, and our President, Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt
project at the appraised fair market value for the interests acquired. This investment entitles these entities to receive
approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt
project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly,
subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any
amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received
distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that
the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the
time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire
amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0
million, respectively, which equal the fair market value of the interests acquired as of the date the investment agreements were
entered into as determined by an independent third party appraisal that we obtained.
Messrs. Holliday and Mathias cannot monetize their interests until after stabilization of the property (50% within three
years after stabilization and 100% three years or more after stabilization). In addition, the agreement calls for us to repurchase
these interests in the event of a sale of One Vanderbilt or a transactional change of control of the Company. We also have the
right to repurchase these interests on the seven-year anniversary of the stabilization of the project or upon the occurrence of
certain separation events prior to the stabilization of the project relating to each of Messrs. Holliday’s and Mathias’s continued
service with us. The price paid upon monetization of the interests will equal the liquidation value of the interests at the time,
with the value of One Vanderbilt being based on its sale price, if applicable, or fair market value as determined by an
independent third party appraiser.
Other
We are entitled to receive fees for providing management, leasing, construction supervision, and asset management
services to certain of our joint ventures as further described in Note 6, "Investments in Unconsolidated Joint Ventures."
Amounts due from joint ventures and related parties at December 31, 2020 and 2019 consisted of the following (in thousands):
Due from joint ventures
Other
Related party receivables
December 31,
2020
2019
$
$
27,006 $
7,651
34,657 $
9,352
11,769
21,121
11. Noncontrolling Interests on the Company's Consolidated Financial Statements
Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating
Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries.
Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in
our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements.
Common Units of Limited Partnership Interest in the Operating Partnership
As of December 31, 2020 and 2019, the noncontrolling interest unit holders owned 5.44%, or 3,938,823 units, and
5.17%, or 4,195,875 units, of the Operating Partnership, respectively, inclusive of retroactive adjustments to reflect the reverse
stock split effectuated by SL Green in January 2021. As of December 31, 2020, 3,938,823 shares of our common stock were
reserved for issuance upon the redemption of units of limited partnership interest of the Operating Partnership.
Noncontrolling interests in the Operating Partnership is recorded at the greater of its cost basis or fair market value based
on the closing stock price of our common stock at the end of the reporting period.
Below is a summary of the activity relating to the noncontrolling interests in the Operating Partnership as of
December 31, 2020 and 2019 (in thousands):
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71
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Principal Maturities
One Vanderbilt Investment
Combined aggregate principal maturities of mortgages and other loans payable, the 2017 credit facility, trust preferred
securities, senior unsecured notes and our share of joint venture debt as of December 31, 2020, including as-of-right extension
options, were as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Scheduled
Amortization
Principal
Revolving
Credit
Facility
Unsecured
Term Loans
Trust
Preferred
Securities
Senior
Unsecured
Notes
Total
Joint
Venture
Debt
$
10,700 $ 300,027 $
— $
— $
— $ 350,000 $ 660,727 $ 1,085,279
8,767
6,599
5,285
829
930
255,435
560,000
272,749
—
580,039
110,000
1,300,000
200,000
—
—
—
—
—
—
—
—
—
—
—
800,000
1,064,202
—
—
1,976,599
478,034
540,947
491,066
617,010
100,000
100,829
1,385,256
100,000
—
680,969
552,813
$
33,110 $ 1,968,250 $ 110,000 $ 1,500,000 $ 100,000 $ 1,250,000 $ 4,961,360 $ 4,672,371
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
Interest expense before capitalized interest
Interest on financing leases
Interest capitalized
Interest income
Interest expense, net
Year Ended December 31,
2020
2019
2018
$
185,934 $
246,848 $
236,719
8,091
(75,167)
(2,179)
3,243
(55,446)
(4,124)
8,069
(34,162)
(1,957)
$
116,679 $
190,521 $
208,669
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates are partially owned by Gary Green, a son of Stephen L. Green,
who serves as a member and as the chairman emeritus of our board of directors, and provide services to certain properties
owned by us. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star
Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services,
respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual
tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service
Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain
threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease
Income earned from the profit participation, which is included in other income on the consolidated statements of
operations, was $1.4 million, $3.9 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018,
We also recorded expenses, inclusive of capitalized expenses, of $13.3 million, $18.8 million and $18.8 million for the
years ended December 31, 2020, 2019 and 2018, respectively, for these services (excluding services provided directly to
agreements.
respectively.
tenants).
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.6 million and $0.6 million for the
years ended December 31, 2020, 2019, and 2018 respectively.
In December 2016, we entered into agreements with entities owned and controlled by our Chairman and CEO, Marc
Holliday, and our President, Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt
project at the appraised fair market value for the interests acquired. This investment entitles these entities to receive
approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt
project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly,
subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any
amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received
distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that
the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the
time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire
amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0
million, respectively, which equal the fair market value of the interests acquired as of the date the investment agreements were
entered into as determined by an independent third party appraisal that we obtained.
Messrs. Holliday and Mathias cannot monetize their interests until after stabilization of the property (50% within three
years after stabilization and 100% three years or more after stabilization). In addition, the agreement calls for us to repurchase
these interests in the event of a sale of One Vanderbilt or a transactional change of control of the Company. We also have the
right to repurchase these interests on the seven-year anniversary of the stabilization of the project or upon the occurrence of
certain separation events prior to the stabilization of the project relating to each of Messrs. Holliday’s and Mathias’s continued
service with us. The price paid upon monetization of the interests will equal the liquidation value of the interests at the time,
with the value of One Vanderbilt being based on its sale price, if applicable, or fair market value as determined by an
independent third party appraiser.
Other
We are entitled to receive fees for providing management, leasing, construction supervision, and asset management
services to certain of our joint ventures as further described in Note 6, "Investments in Unconsolidated Joint Ventures."
Amounts due from joint ventures and related parties at December 31, 2020 and 2019 consisted of the following (in thousands):
Due from joint ventures
Other
Related party receivables
December 31,
2020
2019
$
$
27,006 $
7,651
34,657 $
9,352
11,769
21,121
11. Noncontrolling Interests on the Company's Consolidated Financial Statements
Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating
Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries.
Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in
our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements.
Common Units of Limited Partnership Interest in the Operating Partnership
As of December 31, 2020 and 2019, the noncontrolling interest unit holders owned 5.44%, or 3,938,823 units, and
5.17%, or 4,195,875 units, of the Operating Partnership, respectively, inclusive of retroactive adjustments to reflect the reverse
stock split effectuated by SL Green in January 2021. As of December 31, 2020, 3,938,823 shares of our common stock were
reserved for issuance upon the redemption of units of limited partnership interest of the Operating Partnership.
Noncontrolling interests in the Operating Partnership is recorded at the greater of its cost basis or fair market value based
on the closing stock price of our common stock at the end of the reporting period.
Below is a summary of the activity relating to the noncontrolling interests in the Operating Partnership as of
December 31, 2020 and 2019 (in thousands):
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71
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Balance at beginning of period
Distributions
Issuance of common units
Redemption and conversion of common units
Net income
Accumulated other comprehensive loss allocation
Fair value adjustment
Balance at end of period
December 31,
2020
2019
$
409,862 $
387,805
(12,652)
12,018
(36,085)
20,016
(2,299)
(32,598)
(14,729)
19,403
(27,962)
13,301
(2,276)
34,320
$
358,262 $
409,862
Preferred Units of Limited Partnership Interest in the Operating Partnership
Below is a summary of the preferred units of limited partnership interest in the Operating Partnership as of December 31,
2020:
Issuance
Series A (4)
Series F
Series G (4)
Series K
Series L
Series M
Series P
Series Q
Series R
Series S
Series V
Series W (6)
Stated
Distribution
Rate
Number of
Units
Authorized
Number of
Units Issued
Number of
Units
Outstanding
3.50 %
109,161
109,161
109,161 $
Dividends
Per Unit(1)
Liquidation
Preference
Per Unit(2)
35.0000 $ 1,000.00
Conversion
Price Per
Unit(3)
Date of
Issuance
—
August 2015
7.00 %
60
60
60 $
70.0000 $ 1,000.00 $
4.50 % 1,902,000
1,902,000
863,972 $
1.1250 $
25.00 $
3.50 %
700,000
4.00 %
500,000
563,954
378,634
341,677 $
0.8750 $
25.00 $
372,634 $
1.0000 $
3.75 % 1,600,000
1,600,000
96,357 $
0.9375 $
25.00
25.00
25.00
4.00 %
200,000
3.50 %
268,000
3.50 %
400,000
200,000
268,000
400,000
200,000 $
1.0000 $
268,000 $
0.8750 $
25.00 $
148.95
400,000 $
0.8750 $
25.00 $
154.89
August 2015
4.00 % 1,077,280
1,077,280
1,077,280 $
1.0000 $
3.50 %
40,000
40,000
40,000 $
0.8750 $
(6)
1
1
1
(6)
25.00
25.00
(6)
—
—
August 2015
May 2019
(6)
January 2020
29.12
88.50
134.67
—
—
—
January 2007
January 2012
August 2014
August 2014
February 2015
July 2015
July 2015
(1)
(2)
(3)
(4)
(5)
(6)
Dividends are cumulative, subject to certain provisions.
Units are redeemable at any time at par for cash at the option of the unitholder unless otherwise specified.
If applicable, units are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation
preference plus accumulated and unpaid distributions on the conversion date divided by (ii) the amount shown in the table.
Issued through a consolidated subsidiary. The units are convertible on a one-for-one basis, into the Series B Preferred Units of limited partnership
interest, or the Subsidiary Series B Preferred Units. The Subsidiary Series B Preferred Units can be converted at any time, at the option of the unitholder,
into a number of common stock equal to 6.71348 shares of common stock for each Subsidiary Series B Preferred Unit. As of December 31, 2020, no
Subsidiary Series B Preferred Units have been issued.
Common units of limited partnership interest in the Operating Partnership issued in a conversion may be redeemed in exchange for our common stock
on a 1-to-1 basis. The Series G Preferred Units also provide the holder with the right to require the Operating Partnership to repurchase the Series G
Preferred Units for cash before January 31, 2022.
The Series W preferred unit was issued in January 2020 in exchange for the then-outstanding Series O preferred unit. The holder of the Series W
preferred unit is entitled to quarterly dividends in an amount calculated as (i) 1,350 multiplied by (ii) the current distribution per common unit of limited
partnership in SL Green Operating Partnership. The holder has the right to require the Operating Partnership to repurchase the Series W unit for cash, or
convert the Series W unit for Class B units, in each case at a price that is determined based on the closing price of the Company's common stock at the
time such right is exercised. The unit's liquidation preference is the fair market value of the unit plus accrued distributions at the time of a liquidation
event.
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73
Below is a summary of the activity relating to the preferred units in the Operating Partnership as of December 31, 2020
and 2019 (in thousands):
December 31,
2020
2019
$
283,285 $
300,427
—
(82,750)
1,634
1,000
(18,142)
—
$
202,169 $
283,285
Balance at beginning of period
Issuance of preferred units
Redemption of preferred units
Accrued dividends on preferred units
Balance at end of period
12. Stockholders’ Equity of the Company
Common Stock
Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares
of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000
shares of preferred stock, par value $0.01 per share. As of December 31, 2020, 68,508,127 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
Share Repurchase Program
In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion
of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of
the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of
2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Balance at beginning of period
Distributions
Issuance of common units
Redemption and conversion of common units
Net income
Accumulated other comprehensive loss allocation
Fair value adjustment
Balance at end of period
December 31,
2020
2019
$
409,862 $
387,805
(12,652)
12,018
(36,085)
20,016
(2,299)
(32,598)
(14,729)
19,403
(27,962)
13,301
(2,276)
34,320
$
358,262 $
409,862
Below is a summary of the activity relating to the preferred units in the Operating Partnership as of December 31, 2020
and 2019 (in thousands):
Balance at beginning of period
Issuance of preferred units
Redemption of preferred units
Accrued dividends on preferred units
Balance at end of period
December 31,
2020
2019
$
283,285 $
300,427
—
(82,750)
1,634
1,000
(18,142)
—
$
202,169 $
283,285
Preferred Units of Limited Partnership Interest in the Operating Partnership
Below is a summary of the preferred units of limited partnership interest in the Operating Partnership as of December 31,
12. Stockholders’ Equity of the Company
Common Stock
Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares
of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000
shares of preferred stock, par value $0.01 per share. As of December 31, 2020, 68,508,127 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
Share Repurchase Program
In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion
of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of
the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of
2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
2020:
Issuance
Series A (4)
Series F
Series G (4)
Series K
Series L
Series M
Series P
Series Q
Series R
Series S
Series V
Series W (6)
(1)
(2)
(3)
(4)
Stated
Distribution
Rate
Number of
Units
Authorized
Number of
Units Issued
Number of
Units
Outstanding
Dividends
Per Unit(1)
Liquidation
Preference
Per Unit(2)
Conversion
Price Per
Unit(3)
Date of
Issuance
3.50 %
109,161
109,161
109,161 $
35.0000 $ 1,000.00
—
August 2015
7.00 %
60
60
60 $
70.0000 $ 1,000.00 $
4.50 % 1,902,000
1,902,000
863,972 $
1.1250 $
25.00 $
29.12
88.50
January 2007
January 2012
3.50 %
700,000
4.00 %
500,000
563,954
378,634
372,634 $
1.0000 $
341,677 $
0.8750 $
25.00 $
134.67
August 2014
3.75 % 1,600,000
1,600,000
96,357 $
0.9375 $
4.00 %
200,000
3.50 %
268,000
3.50 %
400,000
200,000
268,000
400,000
200,000 $
1.0000 $
268,000 $
0.8750 $
25.00 $
148.95
400,000 $
0.8750 $
25.00 $
154.89
August 2015
—
—
—
—
—
August 2014
February 2015
July 2015
July 2015
August 2015
May 2019
4.00 % 1,077,280
1,077,280
1,077,280 $
1.0000 $
3.50 %
40,000
40,000
40,000 $
0.8750 $
(6)
1
1
1
(6)
(6)
January 2020
25.00
25.00
25.00
25.00
25.00
(6)
Dividends are cumulative, subject to certain provisions.
Units are redeemable at any time at par for cash at the option of the unitholder unless otherwise specified.
If applicable, units are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation
preference plus accumulated and unpaid distributions on the conversion date divided by (ii) the amount shown in the table.
Issued through a consolidated subsidiary. The units are convertible on a one-for-one basis, into the Series B Preferred Units of limited partnership
interest, or the Subsidiary Series B Preferred Units. The Subsidiary Series B Preferred Units can be converted at any time, at the option of the unitholder,
into a number of common stock equal to 6.71348 shares of common stock for each Subsidiary Series B Preferred Unit. As of December 31, 2020, no
Subsidiary Series B Preferred Units have been issued.
(5)
Common units of limited partnership interest in the Operating Partnership issued in a conversion may be redeemed in exchange for our common stock
on a 1-to-1 basis. The Series G Preferred Units also provide the holder with the right to require the Operating Partnership to repurchase the Series G
Preferred Units for cash before January 31, 2022.
(6)
The Series W preferred unit was issued in January 2020 in exchange for the then-outstanding Series O preferred unit. The holder of the Series W
preferred unit is entitled to quarterly dividends in an amount calculated as (i) 1,350 multiplied by (ii) the current distribution per common unit of limited
partnership in SL Green Operating Partnership. The holder has the right to require the Operating Partnership to repurchase the Series W unit for cash, or
convert the Series W unit for Class B units, in each case at a price that is determined based on the closing price of the Company's common stock at the
time such right is exercised. The unit's liquidation preference is the fair market value of the unit plus accrued distributions at the time of a liquidation
event.
72
73
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
At December 31, 2020, repurchases executed under the program were as follows:
SL Green's earnings per share for the years ended December 31, 2020, 2019, and 2018 are computed as follows (in
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
Shares repurchased
Average price paid per
share
8,105,881
9,468,617
4,465,857
8,538,995
$104.61
$99.03
$86.06
$62.39
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
thousands):
Numerator
Basic Earnings:
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
Perpetual Preferred Stock
We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock,
outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual
dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are
entitled to redeem the Series I Preferred Stock at any time, in whole or from time to time in part, at par for cash. In August
2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of
underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for
9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I
Preferred Units.
Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock
purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our
common stock under the DRSPP. The DRSPP commenced on September 24, 2001.
The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments
and/or stock purchases under the DRSPP for the years ended December 31, 2020, 2019, and 2018, respectively (dollars in
thousands):
Year Ended December 31,
2020
2019
2018
13. Partners' Capital of the Operating Partnership
Shares of common stock issued
16,676
3,757
Dividend reinvestments/stock purchases under the DRSPP
$
1,006 $
334 $
1,359
136
Earnings per Share
We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that
determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid).
Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-
average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur
from share equivalent activity.
Year Ended December 31,
2020
2019
2018
Income attributable to SL Green common stockholders
$
356,105 $
255,484 $
232,312
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
(1,687) $
(1,702) $
(1,042)
(83)
—
—
Net income attributable to SL Green common stockholders (numerator for basic
earnings per share)
$
354,335 $
253,782 $
231,270
Add back: Dilutive effect of earnings allocated to participating securities
Add back: Effect of dilutive securities (redemption of units to common shares)
1,770
20,016
1,702
13,301
1,042
12,216
Income attributable to SL Green common stockholders (numerator for diluted
earnings per share)
$
376,121 $
268,785 $
244,528
Denominator
Basic Shares:
Weighted average common stock outstanding
Effect of Dilutive Securities:
Operating Partnership units redeemable for common shares
Stock-based compensation plans
Contingently issuable shares from special dividend declared December 4, 2020
Diluted weighted average common stock outstanding
Year Ended December 31,
2020
2019
2018
72,552
79,415
84,090
4,096
440
155
77,243
4,275
544
—
84,234
4,562
419
—
89,071
SL Green has excluded 1,728,136, 1,217,153 and 1,106,363 common stock equivalents from the diluted shares
outstanding for the years ended December 31, 2020, 2019, and 2018 respectively, as they were anti-dilutive.
The Company is the sole managing general partner of the Operating Partnership and at December 31, 2020 owned
68,508,127 general and limited partnership interests in the Operating Partnership and 9,200,000 Series I Preferred Units.
Partnership interests in the Operating Partnership are denominated as “common units of limited partnership interest” (also
referred to as “OP Units”) or “preferred units of limited partnership interest” (also referred to as “Preferred Units”). All
references to OP Units and Preferred Units outstanding exclude such units held by the Company. A holder of an OP Unit may
present such OP Unit to the Operating Partnership for redemption at any time (subject to restrictions agreed upon at the
issuance of OP Units to particular holders that may restrict such right for a period of time, generally one year from issuance).
Upon presentation of an OP Unit for redemption, the Operating Partnership must redeem such OP Unit in exchange for the cash
equal to the then value of a share of common stock of the Company, except that the Company may, at its election, in lieu of
cash redemption, acquire such OP Unit for one share of common stock. Because the number of shares of common stock
outstanding at all times equals the number of OP Units that the Company owns, one share of common stock is generally the
economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the
quarterly dividend that may be paid to the holder of a share of common stock. Each series of Preferred Units makes a
distribution that is set in accordance with an amendment to the partnership agreement of the Operating Partnership. Preferred
Units may also be convertible into OP Units at the election of the holder thereof or the Company, subject to the terms of such
Net income (loss) allocated to the preferred unitholders and common unitholders reflects their pro rata share of net income
Preferred Units.
(loss) and distributions.
All unit-related references and measurements including the number of units outstanding and earnings per unit have been
retroactively adjusted to reflect the reverse stock split effectuated by SL Green’s board of directors in January 2021 for all
periods presented in this Annual Report on Form 10-K.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
At December 31, 2020, repurchases executed under the program were as follows:
SL Green's earnings per share for the years ended December 31, 2020, 2019, and 2018 are computed as follows (in
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
Perpetual Preferred Stock
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
share
$104.61
$99.03
$86.06
$62.39
8,105,881
9,468,617
4,465,857
8,538,995
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock,
outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual
dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are
entitled to redeem the Series I Preferred Stock at any time, in whole or from time to time in part, at par for cash. In August
2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of
underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for
9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I
Preferred Units.
Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock
purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our
common stock under the DRSPP. The DRSPP commenced on September 24, 2001.
The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments
and/or stock purchases under the DRSPP for the years ended December 31, 2020, 2019, and 2018, respectively (dollars in
thousands):
Year Ended December 31,
2020
2019
2018
16,676
3,757
1,359
136
Dividend reinvestments/stock purchases under the DRSPP
$
1,006 $
334 $
Shares of common stock issued
Earnings per Share
We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that
determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid).
Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-
average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur
from share equivalent activity.
thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2020
2019
2018
Income attributable to SL Green common stockholders
$
356,105 $
255,484 $
232,312
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
(1,687) $
(1,702) $
(1,042)
(83)
—
—
Net income attributable to SL Green common stockholders (numerator for basic
earnings per share)
$
354,335 $
253,782 $
231,270
Add back: Dilutive effect of earnings allocated to participating securities
Add back: Effect of dilutive securities (redemption of units to common shares)
1,770
20,016
1,702
13,301
1,042
12,216
Income attributable to SL Green common stockholders (numerator for diluted
earnings per share)
$
376,121 $
268,785 $
244,528
Denominator
Basic Shares:
Weighted average common stock outstanding
Effect of Dilutive Securities:
Operating Partnership units redeemable for common shares
Stock-based compensation plans
Contingently issuable shares from special dividend declared December 4, 2020
Diluted weighted average common stock outstanding
Year Ended December 31,
2020
2019
2018
72,552
79,415
84,090
4,096
440
155
77,243
4,275
544
—
84,234
4,562
419
—
89,071
SL Green has excluded 1,728,136, 1,217,153 and 1,106,363 common stock equivalents from the diluted shares
outstanding for the years ended December 31, 2020, 2019, and 2018 respectively, as they were anti-dilutive.
13. Partners' Capital of the Operating Partnership
The Company is the sole managing general partner of the Operating Partnership and at December 31, 2020 owned
68,508,127 general and limited partnership interests in the Operating Partnership and 9,200,000 Series I Preferred Units.
Partnership interests in the Operating Partnership are denominated as “common units of limited partnership interest” (also
referred to as “OP Units”) or “preferred units of limited partnership interest” (also referred to as “Preferred Units”). All
references to OP Units and Preferred Units outstanding exclude such units held by the Company. A holder of an OP Unit may
present such OP Unit to the Operating Partnership for redemption at any time (subject to restrictions agreed upon at the
issuance of OP Units to particular holders that may restrict such right for a period of time, generally one year from issuance).
Upon presentation of an OP Unit for redemption, the Operating Partnership must redeem such OP Unit in exchange for the cash
equal to the then value of a share of common stock of the Company, except that the Company may, at its election, in lieu of
cash redemption, acquire such OP Unit for one share of common stock. Because the number of shares of common stock
outstanding at all times equals the number of OP Units that the Company owns, one share of common stock is generally the
economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the
quarterly dividend that may be paid to the holder of a share of common stock. Each series of Preferred Units makes a
distribution that is set in accordance with an amendment to the partnership agreement of the Operating Partnership. Preferred
Units may also be convertible into OP Units at the election of the holder thereof or the Company, subject to the terms of such
Preferred Units.
Net income (loss) allocated to the preferred unitholders and common unitholders reflects their pro rata share of net income
(loss) and distributions.
All unit-related references and measurements including the number of units outstanding and earnings per unit have been
retroactively adjusted to reflect the reverse stock split effectuated by SL Green’s board of directors in January 2021 for all
periods presented in this Annual Report on Form 10-K.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Limited Partner Units
As of December 31, 2020, limited partners other than SL Green owned 3,938,823 common units of the Operating
Partnership.
Preferred Units
Preferred units not owned by SL Green are further described in Note 11, “Noncontrolling Interests on the Company’s
Consolidated Financial Statements - Preferred Units of Limited Partnership Interest in the Operating Partnership.”
Earnings per Unit
The Operating Partnership's earnings per unit for the years ended December 31, 2020, 2019, and 2018 respectively are
computed as follows (in thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2020
2019
2018
Income attributable to SLGOP common unitholders
$
376,121 $
268,785 $
244,528
Less: distributed earnings allocated to participating securities
(1,687) $
(1,702) $
(1,042)
Less: undistributed earnings allocated to participating securities
(83)
—
—
Net Income attributable to SLGOP common unitholders (numerator for basic
earnings per unit)
Add back: Dilutive effect of earnings allocated to participating securities
Income attributable to SLGOP common unitholders
$
$
374,351 $
267,083 $
243,486
1,770
1,702
1,042
376,121 $
268,785 $
244,528
Denominator
Basic units:
Year Ended December 31,
2020
2019
2018
Weighted average common units outstanding
76,647
83,690
88,652
Effect of Dilutive Securities:
Stock-based compensation plans
Contingently issuable units from special dividend declared December 4, 2020
Diluted weighted average common units outstanding
441
155
544
—
419
—
77,243
84,234
89,071
The Operating Partnership has excluded 1,728,136, 1,217,153, and 1,106,363 common unit equivalents from the diluted
units outstanding for the years ended December 31, 2020, 2019, and 2018 respectively, as they were anti-dilutive.
14. Share-based Compensation
We have stock-based employee and director compensation plans. Our employees are compensated through the Operating
Partnership. Under each plan, whenever the Company issues common or preferred stock, the Operating Partnership issues an
equivalent number of units of limited partnership interest of a corresponding class to the Company.
The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of
stockholders. The 2005 Plan authorizes the issuance of stock options, stock appreciation rights, unrestricted and restricted stock,
phantom shares, dividend equivalent rights, cash-based awards and other equity-based awards. Subject to adjustments upon
certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000 fungible units may be granted
under the 2005 Plan. Currently, different types of awards count against the limit on the number of fungible units differently,
with (1) full-value awards (i.e., those that deliver the full value of the award upon vesting, such as restricted stock) counting as
3.74 Fungible Units per share subject to such awards, (2) stock options, stock appreciation rights and other awards that do not
deliver full value and expire five years from the date of grant counting as 0.73 fungible units per share subject to such awards,
and (3) all other awards (e.g., 10-year stock options) counting as 1.0 fungible units per share subject to such awards. Awards
granted under the 2005 Plan prior to the approval of the fourth amendment and restatement in June 2016 continue to count
against the fungible unit limit based on the ratios that were in effect at the time such awards were granted, which may be
different than the current ratios. As a result, depending on the types of awards issued, the 2005 Plan may result in the issuance
of more or less than 27,030,000 shares. If a stock option or other award granted under the 2005 Plan expires or terminates, the
common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case
may be, will again become available for the issuance of additional awards. Shares of our common stock distributed under the
2005 Plan may be treasury shares or authorized but unissued shares. Currently, unless the 2005 Plan has been previously
terminated by the Company's board of directors, new awards may be granted under the 2005 Plan until June 2, 2026, which is
the tenth anniversary of the date that the 2005 Plan was most recently approved by the Company's stockholders. As of
December 31, 2020, 3.1 million fungible units were available for issuance under the 2005 Plan after reserving for shares
underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral
Program and LTIP Units.
Stock Options and Class O LTIP Units
Options are granted with an exercise price at the fair market value of the Company's common stock on the date of grant
and, subject to employment, generally expire five years or ten years from the date of grant, are not transferable other than on
death, and generally vest in one year to five years commencing one year from the date of grant. We have also granted Class O
LTIP Units, which are a class of LTIP Units in the Operating Partnership structured to provide economics similar to those of
stock options. Class O LTIP Units, once vested, may be converted, at the election of the holder, into a number of common units
of the Operating Partnership per Class O LTIP Unit determined by the increase in value of a share of the Company’s common
stock at the time of conversion over a participation threshold, which equals the fair market value of a share of the Company’s
common stock at the time of grant. Class O LTIP Units are entitled to distributions, subject to vesting, equal per unit to 10% of
the per unit distributions paid with respect to the common units of the Operating Partnership.
The fair value of each stock option or LTIP Unit granted is estimated on the date of grant using the Black-Scholes option
pricing model based on historical information with the following weighted average assumptions for grants during the year
ended December 31, 2018. There were no grants during the years ended December 31, 2019 and 2020.
Dividend yield
Expected life
Risk-free interest rate
Expected stock price volatility
2020
2019
2018
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2.85 %
3.5 years
2.48 %
22.00 %
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of
stockholders. The 2005 Plan authorizes the issuance of stock options, stock appreciation rights, unrestricted and restricted stock,
phantom shares, dividend equivalent rights, cash-based awards and other equity-based awards. Subject to adjustments upon
certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000 fungible units may be granted
under the 2005 Plan. Currently, different types of awards count against the limit on the number of fungible units differently,
with (1) full-value awards (i.e., those that deliver the full value of the award upon vesting, such as restricted stock) counting as
3.74 Fungible Units per share subject to such awards, (2) stock options, stock appreciation rights and other awards that do not
deliver full value and expire five years from the date of grant counting as 0.73 fungible units per share subject to such awards,
and (3) all other awards (e.g., 10-year stock options) counting as 1.0 fungible units per share subject to such awards. Awards
granted under the 2005 Plan prior to the approval of the fourth amendment and restatement in June 2016 continue to count
against the fungible unit limit based on the ratios that were in effect at the time such awards were granted, which may be
different than the current ratios. As a result, depending on the types of awards issued, the 2005 Plan may result in the issuance
of more or less than 27,030,000 shares. If a stock option or other award granted under the 2005 Plan expires or terminates, the
common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case
may be, will again become available for the issuance of additional awards. Shares of our common stock distributed under the
2005 Plan may be treasury shares or authorized but unissued shares. Currently, unless the 2005 Plan has been previously
terminated by the Company's board of directors, new awards may be granted under the 2005 Plan until June 2, 2026, which is
the tenth anniversary of the date that the 2005 Plan was most recently approved by the Company's stockholders. As of
December 31, 2020, 3.1 million fungible units were available for issuance under the 2005 Plan after reserving for shares
underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral
Program and LTIP Units.
Income attributable to SLGOP common unitholders
376,121 $
268,785 $
244,528
Stock Options and Class O LTIP Units
Options are granted with an exercise price at the fair market value of the Company's common stock on the date of grant
and, subject to employment, generally expire five years or ten years from the date of grant, are not transferable other than on
death, and generally vest in one year to five years commencing one year from the date of grant. We have also granted Class O
LTIP Units, which are a class of LTIP Units in the Operating Partnership structured to provide economics similar to those of
stock options. Class O LTIP Units, once vested, may be converted, at the election of the holder, into a number of common units
of the Operating Partnership per Class O LTIP Unit determined by the increase in value of a share of the Company’s common
stock at the time of conversion over a participation threshold, which equals the fair market value of a share of the Company’s
common stock at the time of grant. Class O LTIP Units are entitled to distributions, subject to vesting, equal per unit to 10% of
the per unit distributions paid with respect to the common units of the Operating Partnership.
The fair value of each stock option or LTIP Unit granted is estimated on the date of grant using the Black-Scholes option
pricing model based on historical information with the following weighted average assumptions for grants during the year
ended December 31, 2018. There were no grants during the years ended December 31, 2019 and 2020.
Dividend yield
Expected life
Risk-free interest rate
Expected stock price volatility
2020
2019
2018
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2.85 %
3.5 years
2.48 %
22.00 %
As of December 31, 2020, limited partners other than SL Green owned 3,938,823 common units of the Operating
Limited Partner Units
Partnership.
Preferred Units
Earnings per Unit
computed as follows (in thousands):
Numerator
Basic Earnings:
Preferred units not owned by SL Green are further described in Note 11, “Noncontrolling Interests on the Company’s
Consolidated Financial Statements - Preferred Units of Limited Partnership Interest in the Operating Partnership.”
The Operating Partnership's earnings per unit for the years ended December 31, 2020, 2019, and 2018 respectively are
Year Ended December 31,
2020
2019
2018
Income attributable to SLGOP common unitholders
$
376,121 $
268,785 $
244,528
Less: distributed earnings allocated to participating securities
(1,687) $
(1,702) $
(1,042)
Less: undistributed earnings allocated to participating securities
(83)
—
—
Net Income attributable to SLGOP common unitholders (numerator for basic
earnings per unit)
374,351 $
267,083 $
243,486
Add back: Dilutive effect of earnings allocated to participating securities
1,770
1,702
1,042
$
$
Year Ended December 31,
2020
2019
2018
Denominator
Basic units:
Effect of Dilutive Securities:
Stock-based compensation plans
Weighted average common units outstanding
76,647
83,690
88,652
Contingently issuable units from special dividend declared December 4, 2020
Diluted weighted average common units outstanding
441
155
544
—
419
—
77,243
84,234
89,071
The Operating Partnership has excluded 1,728,136, 1,217,153, and 1,106,363 common unit equivalents from the diluted
units outstanding for the years ended December 31, 2020, 2019, and 2018 respectively, as they were anti-dilutive.
14. Share-based Compensation
We have stock-based employee and director compensation plans. Our employees are compensated through the Operating
Partnership. Under each plan, whenever the Company issues common or preferred stock, the Operating Partnership issues an
equivalent number of units of limited partnership interest of a corresponding class to the Company.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
A summary of the status of the Company's stock options as of December 31, 2020, 2019, and 2018 and changes during
December 31, 2020, there was $36.0 million of total unrecognized compensation expense related to the time-based and
the years ended December 31, 2020, 2019, and 2018 are as follows:
performance based LTIP Unit awards, which is expected to be recognized over a weighted average period of 1.8 years.
During the years ended December 31, 2020, 2019, and 2018, we recorded compensation expense related to bonus, time-
based and performance based LTIP Unit awards of $29.4 million, $22.2 million, and $24.4 million, respectively.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee
directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless
otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The
program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock
upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board
of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee
director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each
participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend
rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock
During the year ended December 31, 2020, 20,753 phantom stock units and 8,417 shares of common stock were issued to
our board of directors. We recorded compensation expense of $2.3 million during the year ended December 31, 2020 related to
the Deferred Compensation Plan. As of December 31, 2020, there were 140,775 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our
employees to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is
intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to
enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP
became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to
adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration
statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of
successive offering periods. Each offering period will be three months in duration and will begin on the first day of each
calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible
employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common
stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period.
The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of December 31, 2020, 156,780
shares of our common stock had been issued under the ESPP.
2020
2019
2018
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Balance at beginning of year
$
1,007,665 $
105.35 $
1,104,780 $
106.56 $
1,504,809 $
104.44
Granted
Exercised
Lapsed or canceled
Balance at end of year
—
—
—
—
—
—
—
—
(222,670)
114.97
(97,115)
119.19
5,830
(307,334)
(98,525)
100.77
92.85
116.52
$
784,995 $
102.62 $
1,007,665 $
105.35 $
1,104,780 $
106.56
Options exercisable at end of year
784,022 $
102.62
888,988 $
104.66
760,834 $
104.24
Weighted average fair value of options
granted during the year
$
—
$
—
$
84,068
units.
The remaining weighted average contractual life of the options outstanding was 2.2 years and the remaining weighted
average contractual life of the options exercisable was 2.2 years.
During the years ended December 31, 2020, 2019, and 2018, we recognized compensation expense for these options of
$0.0 million, $2.5 million, and $5.4 million, respectively. As of December 31, 2020, there was no unrecognized compensation
cost related to unvested stock options.
Restricted Shares
Shares are granted to certain employees, including our executives, and vesting will occur annually upon the completion of
a service period or our meeting established financial performance criteria. Annual vesting occurs at rates ranging from 15% to
35% once performance criteria are reached.
A summary of the Company's restricted stock as of December 31, 2020, 2019, and 2018 and charges during the years
ended December 31, 2020, 2019, and 2018 are as follows:
Balance at beginning of year
Granted
Canceled
Balance at end of year
Vested during the year
Compensation expense recorded
Total fair value of restricted stock granted during the year
2020
2019
2018
3,465,347
3,354,142
8,959
(34,632)
3,439,674
128,891
122,768
(11,563)
3,465,347
110,048
3,204,703
158,281
(8,842)
3,354,142
89,502
$
$
10,895,459 $
12,892,249 $
12,757,704
734,315 $
11,131,181 $
13,440,503
The fair value of restricted stock that vested during the years ended December 31, 2020, 2019, and 2018 was $12.5
million, $12.1 million and $9.8 million, respectively. As of December 31, 2020, there was $7.9 million of total unrecognized
compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.4 years.
For the years ended December 31, 2020, 2019, and 2018, $2.2 million, $2.1 million, and $6.3 million, respectively, was
capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and
stock options.
We granted LTIP Units, which include bonus, time-based and performance based awards, with a fair value of $37.0
million and $58.3 million during the years ended December 31, 2020 and 2019, respectively. The grant date fair value of the
LTIP Unit awards was calculated in accordance with ASC 718. A third party consultant determined the fair value of the LTIP
Units to have a discount from our common stock price. The discount was calculated by considering the inherent uncertainty that
the LTIP Units will reach parity with other common partnership units and the illiquidity due to transfer restrictions. As of
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79
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
A summary of the status of the Company's stock options as of December 31, 2020, 2019, and 2018 and changes during
the years ended December 31, 2020, 2019, and 2018 are as follows:
December 31, 2020, there was $36.0 million of total unrecognized compensation expense related to the time-based and
performance based LTIP Unit awards, which is expected to be recognized over a weighted average period of 1.8 years.
During the years ended December 31, 2020, 2019, and 2018, we recorded compensation expense related to bonus, time-
based and performance based LTIP Unit awards of $29.4 million, $22.2 million, and $24.4 million, respectively.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee
directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless
otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The
program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock
upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board
of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee
director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each
participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend
rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock
units.
During the year ended December 31, 2020, 20,753 phantom stock units and 8,417 shares of common stock were issued to
our board of directors. We recorded compensation expense of $2.3 million during the year ended December 31, 2020 related to
the Deferred Compensation Plan. As of December 31, 2020, there were 140,775 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
During the years ended December 31, 2020, 2019, and 2018, we recognized compensation expense for these options of
$0.0 million, $2.5 million, and $5.4 million, respectively. As of December 31, 2020, there was no unrecognized compensation
Employee Stock Purchase Plan
In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our
employees to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is
intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to
enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP
became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to
adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration
statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of
successive offering periods. Each offering period will be three months in duration and will begin on the first day of each
calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible
employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common
stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period.
The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of December 31, 2020, 156,780
shares of our common stock had been issued under the ESPP.
2020
2019
2018
Options
Outstanding
Options
Outstanding
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Exercise
Price
Weighted
Average
Exercise
Price
Balance at beginning of year
$
1,007,665 $
105.35 $
1,104,780 $
106.56 $
1,504,809 $
104.44
Granted
Exercised
Lapsed or canceled
Balance at end of year
—
—
—
—
—
—
—
—
(222,670)
114.97
(97,115)
119.19
5,830
(307,334)
(98,525)
100.77
92.85
116.52
$
784,995 $
102.62 $
1,007,665 $
105.35 $
1,104,780 $
106.56
Options exercisable at end of year
784,022 $
102.62
888,988 $
104.66
760,834 $
104.24
Weighted average fair value of options
granted during the year
$
—
$
—
$
84,068
The remaining weighted average contractual life of the options outstanding was 2.2 years and the remaining weighted
average contractual life of the options exercisable was 2.2 years.
cost related to unvested stock options.
Restricted Shares
Shares are granted to certain employees, including our executives, and vesting will occur annually upon the completion of
a service period or our meeting established financial performance criteria. Annual vesting occurs at rates ranging from 15% to
35% once performance criteria are reached.
A summary of the Company's restricted stock as of December 31, 2020, 2019, and 2018 and charges during the years
ended December 31, 2020, 2019, and 2018 are as follows:
Balance at beginning of year
Granted
Canceled
Balance at end of year
Vested during the year
Compensation expense recorded
Total fair value of restricted stock granted during the year
2020
2019
2018
3,465,347
3,354,142
8,959
(34,632)
3,439,674
128,891
122,768
(11,563)
3,465,347
110,048
3,204,703
158,281
(8,842)
3,354,142
89,502
$
$
10,895,459 $
12,892,249 $
12,757,704
734,315 $
11,131,181 $
13,440,503
The fair value of restricted stock that vested during the years ended December 31, 2020, 2019, and 2018 was $12.5
million, $12.1 million and $9.8 million, respectively. As of December 31, 2020, there was $7.9 million of total unrecognized
compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.4 years.
For the years ended December 31, 2020, 2019, and 2018, $2.2 million, $2.1 million, and $6.3 million, respectively, was
capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and
stock options.
We granted LTIP Units, which include bonus, time-based and performance based awards, with a fair value of $37.0
million and $58.3 million during the years ended December 31, 2020 and 2019, respectively. The grant date fair value of the
LTIP Unit awards was calculated in accordance with ASC 718. A third party consultant determined the fair value of the LTIP
Units to have a discount from our common stock price. The discount was calculated by considering the inherent uncertainty that
the LTIP Units will reach parity with other common partnership units and the illiquidity due to transfer restrictions. As of
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79
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
15. Accumulated Other Comprehensive (Loss) Income
The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of
December 31, 2020, 2019 and 2018 (in thousands):
Net unrealized
(loss) gain on
derivative
instruments (1)
SL Green’s share
of joint venture
net unrealized
(loss) gain on
derivative
instruments (2)
Net unrealized
gain on
marketable
securities
Total
Balance at December 31, 2017
$
12,542
$
5,020 $
1,042 $
Other comprehensive (loss) income before reclassifications
(2,252)
(103)
Amounts reclassified from accumulated other
comprehensive income
Balance at December 31, 2018
(574)
9,716
Other comprehensive (loss) income before reclassifications
(32,723)
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2019
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
227
(22,780)
(48,532)
13,897
(618)
4,299
(11,956)
(325)
(7,982)
(7,573)
4,702
51
—
1,093
1,184
—
2,277
(1,256)
—
Balance at December 31, 2020
$
(57,415) $
(10,853) $
1,021 $
18,604
(2,304)
(1,192)
15,108
(43,495)
(98)
(28,485)
(57,361)
18,599
(67,247)
(1)
(2)
Amount reclassified from accumulated other comprehensive (loss) income is included in interest expense in the respective consolidated statements of
operations. As of December 31, 2020 and 2019, the deferred net (gains) losses from these terminated hedges, which is included in accumulated other
comprehensive loss relating to net unrealized gain (loss) on derivative instrument, was $(0.5) million and $(0.7) million, respectively.
Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures
in the respective consolidated statements of operations.
16. Fair Value Measurements
We are required to disclose fair value information with regard to our financial instruments, whether or not recognized in
the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a
hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent
of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists
of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting
entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used
when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a
recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from
different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement
falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the
significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific
to the asset or liability.
The following tables set forth the assets and liabilities that we measure at fair value on a recurring and non-recurring
basis by their levels in the fair value hierarchy at December 31, 2020 and 2019 (in thousands):
sales contracts. All of which are classified as Level 3 inputs.
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80
81
Interest rate cap and swap agreements (included in other
Interest rate cap and swap agreements (included in other
Interest rate cap and swap agreements (included in other
Assets:
Marketable securities
assets)
Liabilities:
liabilities)
Assets:
Marketable securities
assets)
Liabilities:
liabilities)
December 31, 2020
Total
Level 1
Level 2
Level 3
28,570
$
—
$
28,570
$
28
$
—
$
28
$
61,217
$
—
$
61,217
$
December 31, 2019
Total
Level 1
Level 2
Level 3
29,887
$
—
$
29,887
$
4,419
$
—
$
4,419
$
—
—
—
—
—
—
$
$
$
$
$
$
Interest rate cap and swap agreements (included in other
29,110
$
—
$
29,110
$
We evaluate real estate investments and debt and preferred equity investments, including intangibles, for potential
impairment primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth
rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and
sales contracts. All of which are classified as Level 3 inputs.
In December 2020, the Company determined there were indicators of impairment in two of its retail assets, 106 Spring
Street and 133 Greene Street. The Company tested the recoverability of the assets and, as a result of the carrying amount of the
assets being deemed not recoverable, recorded impairments of $39.7 million and $14.1 million, respectively. These charges are
included in depreciable real estate reserves and impairments in the consolidated statements of operations. The fair value of the
assets were determined primarily using cash flow projections that apply, among other things, estimated revenue and expense
growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales,
listings and sales contracts. All of which are classified as Level 3 inputs.
In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the
Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our
remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment
of $187.5 million. The fair value of our investment was determined by the terms of the joint venture agreement governing the
capitalization of the project.
In December 2018, the Company determined that it was more likely than not that its Suburban properties would be sold or
otherwise disposed of significantly before the end of their previously estimated useful life. The Company tested the
recoverability of the assets and, as a result of the carrying amount of the assets not being deemed recoverable and exceeding
their fair value as measured on a asset by asset basis, recorded a $221.9 million impairment loss. These charges are included in
depreciable real estate reserves and impairments in the consolidated statement of operations. The fair value of the assets were
determined primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth
rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and
In May 2018, the Company was the successful bidder at the foreclosure of 2 Herald Square, at which time the Company's
$250.5 million outstanding principal balance and $7.7 million accrued interest balance were credited to our equity investment in
the property. We recorded the assets acquired and liabilities assumed at fair value. This resulted in the recognition of a fair
value adjustment of $8.1 million, which is reflected on the Company's consolidated statements of operations within purchase
price and other fair value adjustments. This fair value was determined by utilizing our successful bid at the foreclosure of the
asset, the agreement to sell a partial interest in the property, and cash flow projections that apply, among other things, estimated
revenue and expense growth rates, discount rates and capitalization rates, as well as a sales comparison approach, which utilizes
comparable sales, listings and sales contracts, all of which are classified as Level 3 inputs.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
15. Accumulated Other Comprehensive (Loss) Income
The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of
December 31, 2020, 2019 and 2018 (in thousands):
Net unrealized
(loss) gain on
derivative
instruments (1)
SL Green’s share
of joint venture
net unrealized
(loss) gain on
derivative
instruments (2)
Net unrealized
gain on
marketable
securities
Total
Balance at December 31, 2017
$
12,542
$
5,020 $
1,042 $
Other comprehensive (loss) income before reclassifications
(2,252)
(103)
Other comprehensive (loss) income before reclassifications
(32,723)
Amounts reclassified from accumulated other
comprehensive income
Balance at December 31, 2018
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2019
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
(574)
9,716
227
(22,780)
(48,532)
13,897
(618)
4,299
(11,956)
(325)
(7,982)
(7,573)
4,702
51
—
1,093
1,184
—
2,277
(1,256)
—
18,604
(2,304)
(1,192)
15,108
(43,495)
(98)
(28,485)
(57,361)
18,599
(67,247)
Balance at December 31, 2020
$
(57,415) $
(10,853) $
1,021 $
(1)
Amount reclassified from accumulated other comprehensive (loss) income is included in interest expense in the respective consolidated statements of
operations. As of December 31, 2020 and 2019, the deferred net (gains) losses from these terminated hedges, which is included in accumulated other
comprehensive loss relating to net unrealized gain (loss) on derivative instrument, was $(0.5) million and $(0.7) million, respectively.
(2)
Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures
in the respective consolidated statements of operations.
16. Fair Value Measurements
We are required to disclose fair value information with regard to our financial instruments, whether or not recognized in
the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a
hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent
of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists
of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting
entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used
when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a
recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from
different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement
falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the
significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific
to the asset or liability.
The following tables set forth the assets and liabilities that we measure at fair value on a recurring and non-recurring
basis by their levels in the fair value hierarchy at December 31, 2020 and 2019 (in thousands):
Assets:
Marketable securities
Interest rate cap and swap agreements (included in other
assets)
Liabilities:
Interest rate cap and swap agreements (included in other
liabilities)
Assets:
Marketable securities
Interest rate cap and swap agreements (included in other
assets)
Liabilities:
Interest rate cap and swap agreements (included in other
liabilities)
December 31, 2020
Total
Level 1
Level 2
Level 3
28,570
$
—
$
28,570
$
28
$
—
$
28
$
61,217
$
—
$
61,217
$
December 31, 2019
Total
Level 1
Level 2
Level 3
29,887
$
—
$
29,887
$
4,419
$
—
$
4,419
$
29,110
$
—
$
29,110
$
—
—
—
—
—
—
$
$
$
$
$
$
We evaluate real estate investments and debt and preferred equity investments, including intangibles, for potential
impairment primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth
rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and
sales contracts. All of which are classified as Level 3 inputs.
In December 2020, the Company determined there were indicators of impairment in two of its retail assets, 106 Spring
Street and 133 Greene Street. The Company tested the recoverability of the assets and, as a result of the carrying amount of the
assets being deemed not recoverable, recorded impairments of $39.7 million and $14.1 million, respectively. These charges are
included in depreciable real estate reserves and impairments in the consolidated statements of operations. The fair value of the
assets were determined primarily using cash flow projections that apply, among other things, estimated revenue and expense
growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales,
listings and sales contracts. All of which are classified as Level 3 inputs.
In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the
Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of our
remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment
of $187.5 million. The fair value of our investment was determined by the terms of the joint venture agreement governing the
capitalization of the project.
In December 2018, the Company determined that it was more likely than not that its Suburban properties would be sold or
otherwise disposed of significantly before the end of their previously estimated useful life. The Company tested the
recoverability of the assets and, as a result of the carrying amount of the assets not being deemed recoverable and exceeding
their fair value as measured on a asset by asset basis, recorded a $221.9 million impairment loss. These charges are included in
depreciable real estate reserves and impairments in the consolidated statement of operations. The fair value of the assets were
determined primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth
rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and
sales contracts. All of which are classified as Level 3 inputs.
In May 2018, the Company was the successful bidder at the foreclosure of 2 Herald Square, at which time the Company's
$250.5 million outstanding principal balance and $7.7 million accrued interest balance were credited to our equity investment in
the property. We recorded the assets acquired and liabilities assumed at fair value. This resulted in the recognition of a fair
value adjustment of $8.1 million, which is reflected on the Company's consolidated statements of operations within purchase
price and other fair value adjustments. This fair value was determined by utilizing our successful bid at the foreclosure of the
asset, the agreement to sell a partial interest in the property, and cash flow projections that apply, among other things, estimated
revenue and expense growth rates, discount rates and capitalization rates, as well as a sales comparison approach, which utilizes
comparable sales, listings and sales contracts, all of which are classified as Level 3 inputs.
80
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in the
Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January
1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the
consolidated statements of operations. This fair value was determined using a third party valuation which primarily utilized
cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and
capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of
which are classified as Level 3 inputs.
Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used
to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model
driven valuations using the significant inputs derived from or corroborated by observable market data. We do not intend to sell
these securities and it is not more likely than not that we will be required to sell the investments before recovery of their
amortized cost bases.
The fair value of derivative instruments is based on current market data received from financial sources that trade such
instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized
financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs.
The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and
cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity
investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash
equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated
balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred
equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates
at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of
borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to
their present value using adjusted market interest rates, which is provided by a third-party specialist.
The following table provides the carrying value and fair value of these financial instruments as of December 31, 2020 and
December 31, 2019 (in thousands):
December 31, 2020
December 31, 2019
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Debt and preferred equity investments
Fixed rate debt
Variable rate debt
$
$
$
1,076,542
(2)
$
1,580,306
(2)
3,135,572 $
3,237,075 $
3,536,286 $
1,827,677
1,822,740
2,018,434
4,963,249 $
5,059,815 $
5,554,720 $
3,642,770
2,018,714
5,661,484
(1)
(2)
Amounts exclude net deferred financing costs.
At December 31, 2020, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion. At
December 31, 2019, debt and preferred equity investments had an estimated fair value ranging between $1.6 billion and $1.7 billion.
Disclosure about fair value of financial instruments was based on pertinent information available to us as of December 31,
2020 and 2019. Such amounts have not been comprehensively revalued for purposes of these financial statements since that
date and current estimates of fair value may differ significantly from the amounts presented herein.
instruments.
thousands).
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
17. Financial Instruments: Derivatives and Hedging
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps,
caps, collar and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for
forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair
value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss)
until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively,
depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged
items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging
The following table summarizes the notional value at inception and fair value of our consolidated derivative financial
instruments at December 31, 2020 based on Level 2 information. The notional value is an indication of the extent of our
involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in
Strike
Rate
4.000 %
0.544 %
3.000 %
1.131 %
1.161 %
4.000 %
2.696 %
2.721 %
2.740 %
350,000
111,869
510,000
200,000
100,000
600,000
150,000
150,000
200,000
Notional
Value
Effective
Date
Expiration
Date
Balance Sheet
Location
Fair
Value
$
85,000
March 2019
March 2021 Other Assets
$
April 2020
August 2021 Other Liabilities
3.500 % December 2020
November 2021 Other Assets
June 2020
December 2021 Other Assets
July 2016
July 2016
July 2023 Other Liabilities
July 2023 Other Liabilities
August 2020
September 2023 Other Assets
January 2019
January 2024 Other Liabilities
January 2019
January 2026 Other Liabilities
January 2019
January 2026 Other Liabilities
—
(771)
—
—
(5,004)
(2,578)
28
(11,344)
(17,714)
(23,806)
$
(61,189)
During the years ended December 31, 2020, 2019, and 2018, we recorded a $0.1 million loss, a $0.1 million loss, and a
$0.2 million loss, respectively, on the changes in the fair value, which is included in interest expense in the consolidated
statements of operations.
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company
defaults on certain of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of
December 31, 2020, the fair value of derivatives in a net liability position, including accrued interest but excluding any
adjustment for nonperformance risk related to these agreements, was $62.5 million. As of December 31, 2020, the Company
has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company
had breached any of these provisions, it could have been required to settle its obligations under the agreements at their
aggregate termination value of $63.6 million at December 31, 2020.
Gains and losses on terminated hedges are included in accumulated other comprehensive income (loss), and are
recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and
losses held in accumulated other comprehensive loss will be reclassified into earnings as an adjustment to interest expense in
the same periods in which the hedged interest payments affect earnings. We estimate that $17.0 million of the current balance
held in accumulated other comprehensive loss will be reclassified into interest expense and $6.2 million of the portion related to
our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net (loss) income from
unconsolidated joint ventures within the next 12 months.
The following table presents the effect of our derivative financial instruments and our share of our joint ventures'
derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of
operations for the years ended December 31, 2020, 2019, and 2018, respectively (in thousands):
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83
Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January
1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the
consolidated statements of operations. This fair value was determined using a third party valuation which primarily utilized
cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and
capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of
which are classified as Level 3 inputs.
Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used
to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model
driven valuations using the significant inputs derived from or corroborated by observable market data. We do not intend to sell
these securities and it is not more likely than not that we will be required to sell the investments before recovery of their
amortized cost bases.
The fair value of derivative instruments is based on current market data received from financial sources that trade such
instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized
financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs.
The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and
cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity
investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash
equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated
balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred
equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates
at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of
borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to
their present value using adjusted market interest rates, which is provided by a third-party specialist.
The following table provides the carrying value and fair value of these financial instruments as of December 31, 2020 and
December 31, 2019 (in thousands):
December 31, 2020
December 31, 2019
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
$
$
$
Debt and preferred equity investments
1,076,542
(2)
$
1,580,306
(2)
Fixed rate debt
Variable rate debt
3,135,572 $
3,237,075 $
3,536,286 $
1,827,677
1,822,740
2,018,434
4,963,249 $
5,059,815 $
5,554,720 $
3,642,770
2,018,714
5,661,484
Amounts exclude net deferred financing costs.
(1)
(2)
At December 31, 2020, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion. At
December 31, 2019, debt and preferred equity investments had an estimated fair value ranging between $1.6 billion and $1.7 billion.
Disclosure about fair value of financial instruments was based on pertinent information available to us as of December 31,
2020 and 2019. Such amounts have not been comprehensively revalued for purposes of these financial statements since that
date and current estimates of fair value may differ significantly from the amounts presented herein.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in the
17. Financial Instruments: Derivatives and Hedging
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps,
caps, collar and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for
forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair
value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss)
until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively,
depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged
items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging
instruments.
The following table summarizes the notional value at inception and fair value of our consolidated derivative financial
instruments at December 31, 2020 based on Level 2 information. The notional value is an indication of the extent of our
involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in
thousands).
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Notional
Value
$
85,000
350,000
111,869
510,000
200,000
100,000
600,000
150,000
150,000
200,000
Strike
Rate
4.000 %
0.544 %
Effective
Date
Expiration
Date
Balance Sheet
Location
Fair
Value
March 2019
March 2021 Other Assets
$
April 2020
August 2021 Other Liabilities
3.500 % December 2020
November 2021 Other Assets
3.000 %
1.131 %
1.161 %
4.000 %
2.696 %
2.721 %
2.740 %
June 2020
December 2021 Other Assets
July 2016
July 2016
July 2023 Other Liabilities
July 2023 Other Liabilities
August 2020
September 2023 Other Assets
January 2019
January 2024 Other Liabilities
January 2019
January 2026 Other Liabilities
January 2019
January 2026 Other Liabilities
—
(771)
—
—
(5,004)
(2,578)
28
(11,344)
(17,714)
(23,806)
$
(61,189)
During the years ended December 31, 2020, 2019, and 2018, we recorded a $0.1 million loss, a $0.1 million loss, and a
$0.2 million loss, respectively, on the changes in the fair value, which is included in interest expense in the consolidated
statements of operations.
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company
defaults on certain of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of
December 31, 2020, the fair value of derivatives in a net liability position, including accrued interest but excluding any
adjustment for nonperformance risk related to these agreements, was $62.5 million. As of December 31, 2020, the Company
has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company
had breached any of these provisions, it could have been required to settle its obligations under the agreements at their
aggregate termination value of $63.6 million at December 31, 2020.
Gains and losses on terminated hedges are included in accumulated other comprehensive income (loss), and are
recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and
losses held in accumulated other comprehensive loss will be reclassified into earnings as an adjustment to interest expense in
the same periods in which the hedged interest payments affect earnings. We estimate that $17.0 million of the current balance
held in accumulated other comprehensive loss will be reclassified into interest expense and $6.2 million of the portion related to
our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net (loss) income from
unconsolidated joint ventures within the next 12 months.
The following table presents the effect of our derivative financial instruments and our share of our joint ventures'
derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of
operations for the years ended December 31, 2020, 2019, and 2018, respectively (in thousands):
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Amount of Loss
Recognized in
Other Comprehensive Loss
Year Ended
December 31,
Derivative
2020
2019
2018
Location of (Loss) Gain
Reclassified from
Accumulated Other
Comprehensive Loss into
Income
Amount of (Loss) Gain
Reclassified from
Accumulated Other
Comprehensive Loss into Income
Year Ended
December 31,
2020
2019
2018
Interest Rate Swaps/Caps
Share of unconsolidated
joint ventures' derivative
instruments
$ (51,244) $ (33,907) $
(2,284) Interest expense
$ (14,569) $
(261) $
1,168
(7,977)
(10,322)
(1,788)
$ (59,221) $ (44,229) $
(4,072)
Equity in net (loss) income
from unconsolidated joint
ventures
(4,911)
256
1,097
$ (19,480) $
(5) $
2,265
18. Lease Income
The Operating Partnership is the lessor and the sublessor to tenants under operating and sales-type leases. The minimum
rental amounts due under the leases are generally subject to scheduled fixed increases or adjustments. The leases generally also
require that the tenants reimburse us for increases in certain operating costs and real estate taxes above their base year costs.
Future minimum rents to be received over the next five years and thereafter for operating leases in effect at December 31,
2020 are as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total minimum lease payments
Amount representing interest
Investment in sales-type leases (1)
2021
2022
2023
2024
2025
Thereafter
$
631,775
598,226
546,803
511,087
465,398
2,658,793
5,412,082
The components of lease income from operating leases during the years ended December 31, 2020 and 2019 were as
follows (in thousands):
Fixed lease payments
Variable lease payments
Total lease payments
Amortization of acquired above and below-market leases
Total rental revenue
The table below summarizes our investment in sales-type leases as of December 31, 2020:
Twelve Months Ended
December 31,
2020
2019
$
$
$
702,482 $
858,587
96,040
120,496
798,522 $
979,083
5,901
4,474
804,423 $
983,557
Property
712 Madison Avenue (2)
110 East 42nd Street Garage (3)
15 Beekman (4)
Year of Current
Expiration
Year of Final
Expiration (1)
2021
2069
2089
2021
2069
2089
(1)
(2)
(3)
Reflects exercise of all available renewal options.
In January 2021, the Company closed on the sale of 712 Madison Avenue for a gross sales price of $43.0 million, pursuant to the exercise of a purchase
option by the ground lessee of the property.
In December 2020, the Company entered into a lease with its One Vanderbilt joint venture for use of the garage at 110 East 42nd Street.
(4)
In August 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company for the building at 15 Beekman.
See Note 6, "Investments in Unconsolidated Joint Ventures."
Future minimum lease payments to be received over the next five years and thereafter for our sales-type leases with initial
terms in excess of one year as of December 31, 2020 are as follows (in thousands):
Sales-type leases
46,326
3,375
3,424
3,474
3,525
223,199
283,323
(133,924)
149,399
$
$
$
Twelve Months Ended
December 31,
2020
2019
$
$
(6,237) $
1,817 $
—
—
(1)
This amount is included in other assets in our consolidated balance sheets.
The components of lease income from sales-type leases during the years ended December 31, 2020 and 2019 were as
follows (in thousands):
Loss recognized at commencement, net (1)
Interest income (2)
(1)
(2)
operations.
19. Benefit Plans
These amounts are included in gain on sale of real estate, net and depreciable real estate reserves and impairments in our consolidated statements of
These amounts are included in other income in our consolidated statements of operations.
The building employees are covered by multi-employer defined benefit pension plans and post-retirement health and
welfare plans. We participate in the Building Service 32BJ, or Union, Pension Plan and Health Plan. The Pension Plan is a
multi-employer, non-contributory defined benefit pension plan that was established under the terms of collective bargaining
agreements between the Service Employees International Union, Local 32BJ, the Realty Advisory Board on Labor
Relations, Inc. and certain other employees. This Pension Plan is administered by a joint board of trustees consisting of union
trustees and employer trustees and operates under employer identification number 13-1879376. The Pension Plan year runs
from July 1 to June 30. Employers contribute to the Pension Plan at a fixed rate on behalf of each covered employee. Separate
actuarial information regarding such pension plans is not made available to the contributing employers by the union
administrators or trustees, since the plans do not maintain separate records for each reporting unit. However, on September 28,
2018, September 28, 2019, and September 27, 2020, the actuary certified that for the plan years beginning July 1, 2018, July 1,
2019, and July 1, 2020, the Pension Plan was in critical status under the Pension Protection Act of 2006. The Pension Plan
trustees adopted a rehabilitation plan consistent with this requirement. No surcharges have been paid to the Pension Plan as of
December 31, 2020. For the Pension Plan years ended June 30, 2020, 2019, and 2018, the plan received contributions from
employers totaling $291.3 million, $290.1 million, and $272.3 million. Our contributions to the Pension Plan represent less than
5.0% of total contributions to the plan.
The Health Plan was established under the terms of collective bargaining agreements between the Union, the Realty
Advisory Board on Labor Relations, Inc. and certain other employers. The Health Plan provides health and other benefits to
eligible participants employed in the building service industry who are covered under collective bargaining agreements, or other
written agreements, with the Union. The Health Plan is administered by a Board of Trustees with equal representation by the
employers and the Union and operates under employer identification number 13-2928869. The Health Plan receives
contributions in accordance with collective bargaining agreements or participation agreements. Generally, these agreements
provide that the employers contribute to the Health Plan at a fixed rate on behalf of each covered employee. For the Health Plan
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85
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Share of unconsolidated
joint ventures' derivative
instruments
18. Lease Income
2021
2022
2023
2024
2025
Thereafter
follows (in thousands):
Fixed lease payments
Variable lease payments
Total lease payments
Total rental revenue
Amount of Loss
Recognized in
Other Comprehensive Loss
Year Ended
December 31,
Amount of (Loss) Gain
Reclassified from
Accumulated Other
Comprehensive Loss into Income
Year Ended
December 31,
Derivative
2020
2019
2018
Income
2020
2019
2018
Interest Rate Swaps/Caps
$ (51,244) $ (33,907) $
(2,284) Interest expense
$ (14,569) $
(261) $
1,168
Location of (Loss) Gain
Reclassified from
Accumulated Other
Comprehensive Loss into
Equity in net (loss) income
from unconsolidated joint
(7,977)
(10,322)
(1,788)
ventures
(4,911)
256
1,097
$ (59,221) $ (44,229) $
(4,072)
$ (19,480) $
(5) $
2,265
The Operating Partnership is the lessor and the sublessor to tenants under operating and sales-type leases. The minimum
rental amounts due under the leases are generally subject to scheduled fixed increases or adjustments. The leases generally also
require that the tenants reimburse us for increases in certain operating costs and real estate taxes above their base year costs.
Future minimum rents to be received over the next five years and thereafter for operating leases in effect at December 31,
2020 are as follows (in thousands):
$
631,775
598,226
546,803
511,087
465,398
2,658,793
5,412,082
Twelve Months Ended
December 31,
2020
2019
$
$
$
702,482 $
858,587
96,040
120,496
798,522 $
979,083
5,901
4,474
804,423 $
983,557
Year of Current
Expiration
Year of Final
Expiration (1)
2021
2069
2089
2021
2069
2089
The components of lease income from operating leases during the years ended December 31, 2020 and 2019 were as
Amortization of acquired above and below-market leases
The table below summarizes our investment in sales-type leases as of December 31, 2020:
Property
712 Madison Avenue (2)
110 East 42nd Street Garage (3)
15 Beekman (4)
Reflects exercise of all available renewal options.
option by the ground lessee of the property.
(1)
(2)
(3)
In January 2021, the Company closed on the sale of 712 Madison Avenue for a gross sales price of $43.0 million, pursuant to the exercise of a purchase
In December 2020, the Company entered into a lease with its One Vanderbilt joint venture for use of the garage at 110 East 42nd Street.
(4)
In August 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company for the building at 15 Beekman.
See Note 6, "Investments in Unconsolidated Joint Ventures."
Future minimum lease payments to be received over the next five years and thereafter for our sales-type leases with initial
terms in excess of one year as of December 31, 2020 are as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total minimum lease payments
Amount representing interest
Investment in sales-type leases (1)
Sales-type leases
46,326
3,375
3,424
3,474
3,525
223,199
283,323
(133,924)
149,399
$
$
$
(1)
This amount is included in other assets in our consolidated balance sheets.
The components of lease income from sales-type leases during the years ended December 31, 2020 and 2019 were as
follows (in thousands):
Loss recognized at commencement, net (1)
Interest income (2)
Twelve Months Ended
December 31,
2020
2019
$
$
(6,237) $
1,817 $
—
—
(1)
(2)
These amounts are included in gain on sale of real estate, net and depreciable real estate reserves and impairments in our consolidated statements of
operations.
These amounts are included in other income in our consolidated statements of operations.
19. Benefit Plans
The building employees are covered by multi-employer defined benefit pension plans and post-retirement health and
welfare plans. We participate in the Building Service 32BJ, or Union, Pension Plan and Health Plan. The Pension Plan is a
multi-employer, non-contributory defined benefit pension plan that was established under the terms of collective bargaining
agreements between the Service Employees International Union, Local 32BJ, the Realty Advisory Board on Labor
Relations, Inc. and certain other employees. This Pension Plan is administered by a joint board of trustees consisting of union
trustees and employer trustees and operates under employer identification number 13-1879376. The Pension Plan year runs
from July 1 to June 30. Employers contribute to the Pension Plan at a fixed rate on behalf of each covered employee. Separate
actuarial information regarding such pension plans is not made available to the contributing employers by the union
administrators or trustees, since the plans do not maintain separate records for each reporting unit. However, on September 28,
2018, September 28, 2019, and September 27, 2020, the actuary certified that for the plan years beginning July 1, 2018, July 1,
2019, and July 1, 2020, the Pension Plan was in critical status under the Pension Protection Act of 2006. The Pension Plan
trustees adopted a rehabilitation plan consistent with this requirement. No surcharges have been paid to the Pension Plan as of
December 31, 2020. For the Pension Plan years ended June 30, 2020, 2019, and 2018, the plan received contributions from
employers totaling $291.3 million, $290.1 million, and $272.3 million. Our contributions to the Pension Plan represent less than
5.0% of total contributions to the plan.
The Health Plan was established under the terms of collective bargaining agreements between the Union, the Realty
Advisory Board on Labor Relations, Inc. and certain other employers. The Health Plan provides health and other benefits to
eligible participants employed in the building service industry who are covered under collective bargaining agreements, or other
written agreements, with the Union. The Health Plan is administered by a Board of Trustees with equal representation by the
employers and the Union and operates under employer identification number 13-2928869. The Health Plan receives
contributions in accordance with collective bargaining agreements or participation agreements. Generally, these agreements
provide that the employers contribute to the Health Plan at a fixed rate on behalf of each covered employee. For the Health Plan
84
85
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
years ended, June 30, 2020, 2019, and 2018, the plan received contributions from employers totaling $1.6 billion, $1.5 billion
and $1.4 billion, respectively. Our contributions to the Health Plan represent less than 5.0% of total contributions to the plan.
Contributions we made to the multi-employer plans for the years ended December 31, 2020, 2019 and 2018 are included
in the table below (in thousands):
Benefit Plan
Pension Plan
Health Plan
Other plans
Total plan contributions
401(K) Plan
2020
2019
2018
$
2,480 $
3,103 $
7,688
929
9,949
1,108
3,017
9,310
1,106
$
11,097 $
14,160 $
13,433
In August 1997, we implemented a 401(K) Savings/Retirement Plan, or the 401(K) Plan, to cover eligible employees of
ours, and any designated affiliate. The 401(K) Plan permits eligible employees to defer up to 15% of their annual compensation,
subject to certain limitations imposed by the Code. The employees' elective deferrals are immediately vested and non-
forfeitable upon contribution to the 401(K) Plan. During 2003, we amended our 401(K) Plan to provide for discretionary
matching contributions only. For 2020, 2019 and 2018, a matching contribution equal to 100% of the first 4% of annual
compensation was made. For the years ended December 31, 2020, December 31, 2019, and December 31, 2018 we made
matching contributions of $1.7 million, $1.6 million, and $1.1 million, respectively.
20. Commitments and Contingencies
Legal Proceedings
could have a material adverse impact on us.
Environmental Matters
As of December 31, 2020, the Company and the Operating Partnership were not involved in any material litigation nor, to
management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined
Our management believes that the properties are in compliance in all material respects with applicable Federal, state and
local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it
believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is
unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.
Employment Agreements
Insurance
We have entered into employment agreements with certain executives, which expire between December 2021 and
December 2022. The minimum cash-based compensation, including base salary and guaranteed bonus payments, associated
with these employment agreements total $3.4 million for 2021.
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake
and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR"), within three property insurance
programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain
assets, such as the development of One Vanderbilt. Additionally, one of our captive insurance companies, Belmont Insurance
Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by
our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are
required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments.
However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we
experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as
well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants
requiring us to maintain insurance and we could default under our debt instruments if the cost and/or availability of certain
types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont and
Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net
leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with
such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be
Belmont had loss reserves of $2.9 million and $3.3 million as of December 31, 2020 and 2019, respectively. Ticonderoga
maintained or adequately cover our risk of loss.
had no loss reserves as of December 31, 2020.
Ground Lease Arrangements
We are a tenant under ground leases for certain properties. These leases have expirations from 2022 to 2119, or 2043 to
2119 as fully extended. Certain leases offer extension options which we assess against relevant economic factors to determine
whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods
that we are reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and
Certain of our ground leases are subject to rent resets, generally based on a percentage of the then fair market value, a
fixed amount, or a percentage of the preceding rent at specified future dates. Rent resets will be recognized in the periods in
right of use asset.
which they are incurred.
The table below summarizes our current ground lease arrangements as of December 31, 2020:
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86
87
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
years ended, June 30, 2020, 2019, and 2018, the plan received contributions from employers totaling $1.6 billion, $1.5 billion
20. Commitments and Contingencies
and $1.4 billion, respectively. Our contributions to the Health Plan represent less than 5.0% of total contributions to the plan.
Contributions we made to the multi-employer plans for the years ended December 31, 2020, 2019 and 2018 are included
in the table below (in thousands):
Benefit Plan
Pension Plan
Health Plan
Other plans
Total plan contributions
401(K) Plan
2020
2019
2018
$
2,480 $
3,103 $
7,688
929
9,949
1,108
3,017
9,310
1,106
$
11,097 $
14,160 $
13,433
In August 1997, we implemented a 401(K) Savings/Retirement Plan, or the 401(K) Plan, to cover eligible employees of
ours, and any designated affiliate. The 401(K) Plan permits eligible employees to defer up to 15% of their annual compensation,
subject to certain limitations imposed by the Code. The employees' elective deferrals are immediately vested and non-
forfeitable upon contribution to the 401(K) Plan. During 2003, we amended our 401(K) Plan to provide for discretionary
matching contributions only. For 2020, 2019 and 2018, a matching contribution equal to 100% of the first 4% of annual
compensation was made. For the years ended December 31, 2020, December 31, 2019, and December 31, 2018 we made
matching contributions of $1.7 million, $1.6 million, and $1.1 million, respectively.
Legal Proceedings
As of December 31, 2020, the Company and the Operating Partnership were not involved in any material litigation nor, to
management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined
could have a material adverse impact on us.
Environmental Matters
Our management believes that the properties are in compliance in all material respects with applicable Federal, state and
local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it
believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is
unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.
Employment Agreements
We have entered into employment agreements with certain executives, which expire between December 2021 and
December 2022. The minimum cash-based compensation, including base salary and guaranteed bonus payments, associated
with these employment agreements total $3.4 million for 2021.
Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake
and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR"), within three property insurance
programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain
assets, such as the development of One Vanderbilt. Additionally, one of our captive insurance companies, Belmont Insurance
Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by
our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are
required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments.
However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we
experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as
well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants
requiring us to maintain insurance and we could default under our debt instruments if the cost and/or availability of certain
types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont and
Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net
leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with
such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be
maintained or adequately cover our risk of loss.
Belmont had loss reserves of $2.9 million and $3.3 million as of December 31, 2020 and 2019, respectively. Ticonderoga
had no loss reserves as of December 31, 2020.
Ground Lease Arrangements
We are a tenant under ground leases for certain properties. These leases have expirations from 2022 to 2119, or 2043 to
2119 as fully extended. Certain leases offer extension options which we assess against relevant economic factors to determine
whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods
that we are reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and
right of use asset.
Certain of our ground leases are subject to rent resets, generally based on a percentage of the then fair market value, a
fixed amount, or a percentage of the preceding rent at specified future dates. Rent resets will be recognized in the periods in
which they are incurred.
The table below summarizes our current ground lease arrangements as of December 31, 2020:
86
87
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Year of Current
Expiration
Year of Final
Expiration (2)
December 31, 2020 and 2019 (in thousands):
The following table provides lease cost information for the Company's operating leases for the twelve months ended
2043
2022
2050
2033
2027
2111
2119
2043
2054
2080
2083
2084
2111
2119
Property (1)
1185 Avenue of the Americas
625 Madison Avenue
420 Lexington Avenue
711 Third Avenue (3)
461 Fifth Avenue (4)
1080 Amsterdam Avenue (5)
15 Beekman (4)(6)
(1)
(2)
(3)
(4)
(5)
(6)
All leases are classified as operating leases unless otherwise specified.
Reflects exercise of all available renewal options.
The Company owns 50% of the fee interest.
The Company has an option to purchase the ground lease for a fixed price on a specific date. The lease is classified as a financing lease.
A portion of the lease is classified as a financing lease.
In August 2020, the Company entered into a long-term sublease with an unconsolidated joint venture as part of the capitalization of the 15 Beekman
development project. See Note 6, "Investments in Unconsolidated Joint Ventures."
The following is a schedule of future minimum lease payments as evaluated in accordance with ASC 842 for our
financing leases and operating leases with initial terms in excess of one year as of December 31, 2020 (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total minimum lease payments
Amount representing interest
Amount discounted using incremental borrowing rate
Lease liabilities
Financing leases
Operating leases (1)
$
32,527 $
3,523
3,570
3,641
3,810
260,550
307,621 $
(155,100)
152,521 $
$
$
28,534
26,228
23,921
23,939
24,026
504,360
631,008
(291,550)
339,458
(1)
As of December 31, 2020, the total future minimum payments to be received under non-cancelable subleases is $1.7 billion.
(1)
This amount is included in operating lease rent in our consolidated statements of operations.
The following table provides lease cost information for the Company's financing leases for the twelve months ended
December 31, 2020 and 2019 (in thousands):
Operating Lease Costs
Operating lease costs before capitalized operating lease costs
Operating lease costs capitalized
Operating lease costs, net (1)
Financing Lease Costs
Interest on financing leases before capitalized interest
Interest on financing leases capitalized
Interest on financing leases, net (1)
Amortization of right-of-use assets (2)
Financing lease costs, net
Twelve Months Ended
December 31,
2020
2019
$
$
32,169 $
33,235
(3,127)
(47)
29,043 $
33,188
Twelve Months Ended
December 31,
2020
2019
$
8,091 $
(2,378)
5,713
1,200
$
6,913 $
3,243
—
3,243
1,219
4,462
(1)
(2)
These amounts are included in interest expense, net of interest income in our consolidated statements of operations.
These amounts are included in depreciation and amortization in our consolidated statements of operations.
As of December 31, 2020, the weighted-average discount rate used to calculate the lease liabilities was 4.71%. As of
December 31, 2020, the weighted-average remaining lease term was 27 years, inclusive of purchase options expected to be
exercised.
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88
89
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
Year of Current
Expiration
Year of Final
Expiration (2)
The following table provides lease cost information for the Company's operating leases for the twelve months ended
December 31, 2020 and 2019 (in thousands):
Operating Lease Costs
Operating lease costs before capitalized operating lease costs
Operating lease costs capitalized
Operating lease costs, net (1)
Twelve Months Ended
December 31,
2020
2019
$
$
32,169 $
33,235
(3,127)
(47)
29,043 $
33,188
(1)
This amount is included in operating lease rent in our consolidated statements of operations.
The following table provides lease cost information for the Company's financing leases for the twelve months ended
December 31, 2020 and 2019 (in thousands):
The Company has an option to purchase the ground lease for a fixed price on a specific date. The lease is classified as a financing lease.
A portion of the lease is classified as a financing lease.
In August 2020, the Company entered into a long-term sublease with an unconsolidated joint venture as part of the capitalization of the 15 Beekman
Financing Lease Costs
Twelve Months Ended
December 31,
2020
2019
Interest on financing leases before capitalized interest
$
8,091 $
Interest on financing leases capitalized
Interest on financing leases, net (1)
Amortization of right-of-use assets (2)
Financing lease costs, net
(2,378)
5,713
1,200
$
6,913 $
3,243
—
3,243
1,219
4,462
(1)
(2)
These amounts are included in interest expense, net of interest income in our consolidated statements of operations.
These amounts are included in depreciation and amortization in our consolidated statements of operations.
As of December 31, 2020, the weighted-average discount rate used to calculate the lease liabilities was 4.71%. As of
December 31, 2020, the weighted-average remaining lease term was 27 years, inclusive of purchase options expected to be
exercised.
Property (1)
1185 Avenue of the Americas
625 Madison Avenue
420 Lexington Avenue
711 Third Avenue (3)
461 Fifth Avenue (4)
1080 Amsterdam Avenue (5)
15 Beekman (4)(6)
(1)
(2)
(3)
(4)
(5)
(6)
2021
2022
2023
2024
2025
All leases are classified as operating leases unless otherwise specified.
Reflects exercise of all available renewal options.
The Company owns 50% of the fee interest.
development project. See Note 6, "Investments in Unconsolidated Joint Ventures."
The following is a schedule of future minimum lease payments as evaluated in accordance with ASC 842 for our
financing leases and operating leases with initial terms in excess of one year as of December 31, 2020 (in thousands):
Thereafter
Total minimum lease payments
Amount representing interest
Amount discounted using incremental borrowing rate
Lease liabilities
(1)
As of December 31, 2020, the total future minimum payments to be received under non-cancelable subleases is $1.7 billion.
Financing leases
Operating leases (1)
$
32,527 $
3,523
3,570
3,641
3,810
260,550
307,621 $
(155,100)
152,521 $
$
$
2043
2022
2050
2033
2027
2111
2119
2043
2054
2080
2083
2084
2111
2119
28,534
26,228
23,921
23,939
24,026
504,360
631,008
(291,550)
339,458
88
89
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
21. Segment Information
The Company has two reportable segments, real estate and debt and preferred equity investments. We evaluate real estate
performance and allocate resources based on earnings contributions.
The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue. Real estate
property operating expenses consist primarily of security, maintenance, utility costs, insurance, real estate taxes and ground rent
expense (at certain applicable properties). See Note 5, "Debt and Preferred Equity Investments," for additional details on our
debt and preferred equity investments.
Selected consolidated results of operations for the years ended December 31, 2020, 2019, and 2018, and selected asset
information as of December 31, 2020 and 2019, regarding our operating segments are as follows (in thousands):
Total revenues
Years ended:
December 31, 2020
December 31, 2019
December 31, 2018
Net Income
Years ended:
December 31, 2020
December 31, 2019
December 31, 2018
Total assets
As of:
December 31, 2020
December 31, 2019
Real Estate
Segment
Debt and Preferred
Equity Segment
Total Company
$
932,581 $
120,163 $
1,043,405
1,025,900
195,590
201,492
$
354,353 $
60,405 $
158,972
129,253
132,515
141,603
1,052,744
1,238,995
1,227,392
414,758
291,487
270,856
$
10,579,899 $
1,127,668 $
11,063,155
1,703,165
11,707,567
12,766,320
Interest costs for the debt and preferred equity segment include actual costs incurred for borrowings on the 2017 MRA
and the FHLB Facility. Interest is imputed on the investments that do not collateralize the 2017 MRA and the FHLB Facility
using our weighted average corporate borrowing cost. We also allocate loan loss reserves, net of recoveries, and transaction
related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses to the
debt and preferred equity segment because the use of personnel and resources is dependent on transaction volume between the
two segments and varies period over period. In addition, we base performance on the individual segments prior to allocating
marketing, general and administrative expenses. For the years ended, December 31, 2020, 2019, and 2018 marketing, general
and administrative expenses totaled $91.8 million, $100.9 million, and $92.6 million respectively. All other expenses, except
interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2020
(in thousands)
Column D Cost
Capitalized
Subsequent To
Acquisition (1)
Column A
Column B
Column C
Initial Cost
Column E Gross Amount at Which
Carried at Close of Period
Column F
Column G
Column H
Column I
Description (2)
Encumbrances
Land
Building &
Improvements
Land
Building &
Improvements
Land
Improvements (3)
Total
Building &
Accumulated
Depreciation
Date of
Date
Construction
Acquired
Depreciation is
Computed
420 Lexington
Ave
711 Third Avenue
555 W. 57th Street
220 East 42nd
Street
461 Fifth Avenue
750 Third Avenue
625 Madison
Avenue
485 Lexington
Avenue
609 Fifth Avenue
(4)
810 Seventh
Avenue
1185 Avenue of
the Americas
1350 Avenue of
the Americas
1-6 Landmark
Square (5)
7 Landmark
Square (5)
100 Church Street
204,875
34,994
11,391
34,994
195,323
230,317
125 Park Avenue
110 East
42nd Street (6)
304 Park Avenue
635 Sixth Avenue
641 Sixth Avenue
1080 Amsterdam
(7)
760 Madison
Avenue (8)
719 Seventh
Avenue (9)
110 Greene Street
185 Broadway
(10)
133 Greene Street
(11)
712 Madison
Avenue (12)
106 Spring Street
707 Eleventh
Avenue
590 Fifth Avenue
Other (13)
Total
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
294,035
$
—
$
333,499
$
$
201,776
$
—
$
535,275
$
535,275
$
166,886
510,000
51,008
183,461
51,008
387,188
438,196
137,153
19,844
18,846
—
51,093
115,769
140,946
203,727
88,276
251,523
69,098
19,844
184,867
204,711
1,600
18,846
142,546
161,392
61,237
81,420
35,988
—
124,264
124,264
36,758
(2,288)
51,093
249,235
300,328
109,824
Life on
Which
Various
Various
Various
Various
Various
Various
1927
1955
1971
1929
1988
1958
3/1998
5/1998
1/1999
2/2003
10/2003
7/2004
—
291,319
37,997
—
329,316
329,316
139,403
1956
10/2004
Various
450,000
78,282
452,631
(22,346)
78,282
430,285
508,567
173,769
1956
12/2004
Various
57,651
16,869
107,185
53,002
16,869
160,187
177,056
19,881
1925
6/2006
Various
114,077
550,819
3,390
114,077
554,209
668,286
205,774
1970
1/2007
Various
—
791,106
123,470
—
914,576
914,576
320,735
1969
1/2007
Various
90,941
431,517
(2,431)
90,941
429,086
520,027
155,186
1966
1/2007
Various
100,000
27,852
161,343
(6,939)
(40,256)
20,913
121,087
142,000
32,099
1973-1984
1/2007
Various
—
1,721
8,417
(1,338)
(6,240)
383
2,177
2,560
120,900
36,196
54,489
24,343
45,976
78,353
(2,334)
183,932
270,598
90,643
88,261
77,076
12,499
120,900
283,097
403,997
1,068
1,484
95
355
33,862
54,489
24,343
45,976
79,421
92,127
88,356
77,431
113,283
146,616
112,699
123,407
426
65,763
99,736
24,330
23,428
17,412
21,231
2007
1959
1923
1921
1930
1902
1902
1/2007
1/2010
10/2010
5/2011
6/2012
9/2012
9/2012
Various
Various
Various
Various
Various
Various
Various
34,773
—
47,948
10,327
—
58,275
58,275
7,937
1932
10/2012
Various
—
284,286
8,314
6,153
29,133
290,439
37,447
327,886
5,392
1996/2012
7/2014
Various
50,000
—
41,180
45,120
46,232
228,393
(4,750)
41,180
41,482
82,662
3,034
45,120
231,427
276,547
2,323
36,767
1927
1910
7/2014
7/2015
Various
Various
158,478
45,540
27,865
111,462
45,540
139,327
184,867
419
1921
8/2015
Various
15,523
3,446
27,542
(1,563)
(12,377)
1,883
15,165
17,048
1,526
1900
10/2018
Various
28,000
38,025
—
—
—
7,207
14,173
66,237
39,685
1,734
47,397
(7,207)
(47,397)
—
—
—
—
1900/1980
12/2018
66,052
(6,979)
(32,335)
7,194
33,717
40,911
20,874
51,380
16,224
10,442
66,237
3,193
39,685
241
1,734
31,316
54,573
16,465
97,553
94,258
18,199
2,911
—
657
5,694
1900
1901
1987
4/2019
1/2020
10/2020
Various
Various
Various
Various
$
1,941,360
$ 1,336,041
$
5,305,161
$ (20,207) $
734,086
$ 1,315,832 $
6,039,247
$ 7,355,079
$ 1,956,077
Includes depreciable real estate reserves and impairments recorded subsequent to acquisition.
All properties located in New York, New York unless otherwise noted.
In 2020, we sold the retail condominium at this property. The amounts presented here relate to the office condominium, which we retained.
Includes right of use lease assets.
Property located in Connecticut.
We own a 92.5% interest in this property.
We own a 75.0% interest in this property.
In December 2020, the Company entered into a lease with its One Vanderbilt joint venture for use of the garage at 110 East 42nd Street. This lease is accounted for as a sales-type lease.
Includes amounts attributable to the property at 762 Madison Avenue, which is part of this development project.
Properties at 5-7 Dey Street, 183 Broadway, and 185 Broadway were demolished in preparation of the development site for the 185 Broadway project.
In February 2021, this debt was extinguished after the lender was the winning bidder in a foreclosure auction for the property.
In 2020, the lease to the ground lessee of the property was reclassified as a sales-type lease. In January 2021, the Company closed on the sale of the property pursuant to the exercise of a purchase
90
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option by the ground lessee.
(13)
Other includes tenant improvements of eEmerge, capitalized interest and corporate improvements.
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21. Segment Information
The Company has two reportable segments, real estate and debt and preferred equity investments. We evaluate real estate
performance and allocate resources based on earnings contributions.
The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue. Real estate
property operating expenses consist primarily of security, maintenance, utility costs, insurance, real estate taxes and ground rent
expense (at certain applicable properties). See Note 5, "Debt and Preferred Equity Investments," for additional details on our
debt and preferred equity investments.
Selected consolidated results of operations for the years ended December 31, 2020, 2019, and 2018, and selected asset
information as of December 31, 2020 and 2019, regarding our operating segments are as follows (in thousands):
Total revenues
Years ended:
December 31, 2020
December 31, 2019
December 31, 2018
Net Income
Years ended:
December 31, 2020
December 31, 2019
December 31, 2018
Total assets
As of:
December 31, 2020
December 31, 2019
Real Estate
Segment
Debt and Preferred
Equity Segment
Total Company
$
932,581 $
120,163 $
1,043,405
1,025,900
195,590
201,492
$
354,353 $
60,405 $
158,972
129,253
132,515
141,603
1,052,744
1,238,995
1,227,392
414,758
291,487
270,856
$
10,579,899 $
1,127,668 $
11,063,155
1,703,165
11,707,567
12,766,320
Interest costs for the debt and preferred equity segment include actual costs incurred for borrowings on the 2017 MRA
and the FHLB Facility. Interest is imputed on the investments that do not collateralize the 2017 MRA and the FHLB Facility
using our weighted average corporate borrowing cost. We also allocate loan loss reserves, net of recoveries, and transaction
related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses to the
debt and preferred equity segment because the use of personnel and resources is dependent on transaction volume between the
two segments and varies period over period. In addition, we base performance on the individual segments prior to allocating
marketing, general and administrative expenses. For the years ended, December 31, 2020, 2019, and 2018 marketing, general
and administrative expenses totaled $91.8 million, $100.9 million, and $92.6 million respectively. All other expenses, except
interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2020
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2020
(in thousands)
Column A
Column B
Column C
Initial Cost
Column D Cost
Capitalized
Subsequent To
Acquisition (1)
Column E Gross Amount at Which
Carried at Close of Period
Column F
Column G
Column H
Column I
Description (2)
Encumbrances
Land
Building &
Improvements
Land
Building &
Improvements
Land
Building &
Improvements (3)
Total
Accumulated
Depreciation
Date of
Construction
Date
Acquired
$
294,035
$
—
$
333,499
$
—
—
19,844
18,846
510,000
51,008
—
51,093
—
—
—
115,769
140,946
203,727
88,276
251,523
—
291,319
450,000
78,282
452,631
57,651
16,869
107,185
—
—
—
114,077
550,819
—
791,106
90,941
431,517
$
201,776
$
—
$
535,275
$
535,275
$
166,886
69,098
19,844
184,867
204,711
1,600
18,846
142,546
161,392
61,237
81,420
183,461
51,008
387,188
438,196
137,153
35,988
—
124,264
124,264
36,758
(2,288)
51,093
249,235
300,328
109,824
1927
1955
1971
1929
1988
1958
3/1998
5/1998
1/1999
2/2003
10/2003
7/2004
37,997
—
329,316
329,316
139,403
1956
10/2004
Various
(22,346)
78,282
430,285
508,567
173,769
1956
12/2004
Various
53,002
16,869
160,187
177,056
19,881
1925
6/2006
Various
3,390
114,077
554,209
668,286
205,774
1970
1/2007
Various
123,470
—
914,576
914,576
320,735
1969
1/2007
Various
(2,431)
90,941
429,086
520,027
155,186
1966
1/2007
Various
Life on
Which
Depreciation is
Computed
Various
Various
Various
Various
Various
Various
100,000
27,852
161,343
(6,939)
(40,256)
20,913
121,087
142,000
32,099
1973-1984
1/2007
Various
100 Church Street
204,875
34,994
—
1,721
8,417
(1,338)
(6,240)
383
2,177
2,560
—
—
—
—
—
120,900
36,196
54,489
24,343
45,976
183,932
270,598
—
—
78,353
(2,334)
90,643
88,261
77,076
11,391
34,994
195,323
230,317
12,499
120,900
283,097
403,997
1,068
1,484
95
355
33,862
54,489
24,343
45,976
79,421
92,127
88,356
77,431
113,283
146,616
112,699
123,407
426
65,763
99,736
24,330
23,428
17,412
21,231
2007
1959
1923
1921
1930
1902
1902
1/2007
1/2010
10/2010
5/2011
6/2012
9/2012
9/2012
Various
Various
Various
Various
Various
Various
Various
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
34,773
—
47,948
10,327
—
58,275
58,275
7,937
1932
10/2012
Various
—
284,286
8,314
6,153
29,133
290,439
37,447
327,886
5,392
1996/2012
7/2014
Various
50,000
—
41,180
45,120
46,232
228,393
158,478
45,540
27,865
—
—
—
(4,750)
41,180
41,482
82,662
3,034
45,120
231,427
276,547
2,323
36,767
1927
1910
7/2014
7/2015
Various
Various
111,462
45,540
139,327
184,867
419
1921
8/2015
Various
15,523
3,446
27,542
(1,563)
(12,377)
1,883
15,165
17,048
1,526
1900
10/2018
Various
28,000
38,025
—
—
—
7,207
14,173
66,237
39,685
1,734
47,397
(7,207)
(47,397)
—
—
—
—
1900/1980
12/2018
66,052
(6,979)
(32,335)
7,194
33,717
40,911
20,874
51,380
16,224
—
—
—
10,442
66,237
3,193
39,685
241
1,734
31,316
54,573
16,465
97,553
94,258
18,199
2,911
—
657
5,694
1900
1901
1987
4/2019
1/2020
10/2020
Various
Various
Various
Various
$
1,941,360
$ 1,336,041
$
5,305,161
$ (20,207) $
734,086
$ 1,315,832 $
6,039,247
$ 7,355,079
$ 1,956,077
420 Lexington
Ave
711 Third Avenue
555 W. 57th Street
220 East 42nd
Street
461 Fifth Avenue
750 Third Avenue
625 Madison
Avenue
485 Lexington
Avenue
609 Fifth Avenue
(4)
810 Seventh
Avenue
1185 Avenue of
the Americas
1350 Avenue of
the Americas
1-6 Landmark
Square (5)
7 Landmark
Square (5)
125 Park Avenue
110 East
42nd Street (6)
304 Park Avenue
635 Sixth Avenue
641 Sixth Avenue
1080 Amsterdam
(7)
760 Madison
Avenue (8)
719 Seventh
Avenue (9)
110 Greene Street
185 Broadway
(10)
133 Greene Street
(11)
712 Madison
Avenue (12)
106 Spring Street
707 Eleventh
Avenue
590 Fifth Avenue
Other (13)
Total
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
Includes depreciable real estate reserves and impairments recorded subsequent to acquisition.
All properties located in New York, New York unless otherwise noted.
Includes right of use lease assets.
In 2020, we sold the retail condominium at this property. The amounts presented here relate to the office condominium, which we retained.
Property located in Connecticut.
In December 2020, the Company entered into a lease with its One Vanderbilt joint venture for use of the garage at 110 East 42nd Street. This lease is accounted for as a sales-type lease.
We own a 92.5% interest in this property.
Includes amounts attributable to the property at 762 Madison Avenue, which is part of this development project.
We own a 75.0% interest in this property.
Properties at 5-7 Dey Street, 183 Broadway, and 185 Broadway were demolished in preparation of the development site for the 185 Broadway project.
In February 2021, this debt was extinguished after the lender was the winning bidder in a foreclosure auction for the property.
In 2020, the lease to the ground lessee of the property was reclassified as a sales-type lease. In January 2021, the Company closed on the sale of the property pursuant to the exercise of a purchase
option by the ground lessee.
Other includes tenant improvements of eEmerge, capitalized interest and corporate improvements.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2020
(in thousands)
To the Shareholders and the Board of Directors of SL Green Realty Corp.
Report of Independent Registered Public Accounting Firm
The changes in real estate for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
Opinion on the Financial Statements
Balance at beginning of year
Property acquisitions
Improvements
Retirements/disposals/deconsolidation
Balance at end of year
2020
2019
2018
$
8,784,567 $
8,513,935 $
10,206,122
178,635
481,327
(2,089,450)
—
251,674
18,958
52,939
267,726
(2,012,852)
$
7,355,079 $
8,784,567 $
8,513,935
The aggregate cost of land, buildings and improvements, before depreciation, for Federal income tax purposes at
December 31, 2020 was $9.7 billion (unaudited).
The changes in accumulated depreciation, exclusive of amounts relating to equipment, autos, and furniture and fixtures,
for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
We have audited the accompanying consolidated balance sheets of SL Green Realty Corp. (the Company) as of December 31,
2020 and 2019, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at
Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity
with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 26, 2021 expressed an unqualified opinion thereon.
Balance at beginning of year
Depreciation for year
Retirements/disposals/deconsolidation
Balance at end of year
2020
2019
2018
$
2,060,560 $
2,099,137 $
2,300,116
270,843
(375,326)
222,867
(261,444)
245,033
(446,012)
$
1,956,077 $
2,060,560 $
2,099,137
Adoption of ASU No. 2016-02
Adoption of ASU No. 2016-13
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in
2019 due to the adoption of ASU No. 2016-02, Leases (Topic 842), and the related amendments.
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for the
measurement of credit losses on financial instruments in 2020 due to the adoption of ASU No. 2016-13, Financial Instruments
– Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and the related amendments.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit
matters or on the accounts or disclosures to which they relate.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2020
(in thousands)
To the Shareholders and the Board of Directors of SL Green Realty Corp.
Report of Independent Registered Public Accounting Firm
The changes in real estate for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
Opinion on the Financial Statements
Balance at beginning of year
Property acquisitions
Improvements
Retirements/disposals/deconsolidation
Balance at end of year
Balance at beginning of year
Depreciation for year
Retirements/disposals/deconsolidation
Balance at end of year
2020
2019
2018
$
8,784,567 $
8,513,935 $
10,206,122
178,635
481,327
(2,089,450)
—
251,674
18,958
52,939
267,726
(2,012,852)
$
7,355,079 $
8,784,567 $
8,513,935
2020
2019
2018
$
2,060,560 $
2,099,137 $
2,300,116
270,843
(375,326)
222,867
(261,444)
245,033
(446,012)
$
1,956,077 $
2,060,560 $
2,099,137
The aggregate cost of land, buildings and improvements, before depreciation, for Federal income tax purposes at
December 31, 2020 was $9.7 billion (unaudited).
The changes in accumulated depreciation, exclusive of amounts relating to equipment, autos, and furniture and fixtures,
for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
We have audited the accompanying consolidated balance sheets of SL Green Realty Corp. (the Company) as of December 31,
2020 and 2019, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at
Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity
with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 26, 2021 expressed an unqualified opinion thereon.
Adoption of ASU No. 2016-02
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in
2019 due to the adoption of ASU No. 2016-02, Leases (Topic 842), and the related amendments.
Adoption of ASU No. 2016-13
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for the
measurement of credit losses on financial instruments in 2020 due to the adoption of ASU No. 2016-13, Financial Instruments
– Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and the related amendments.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit
matters or on the accounts or disclosures to which they relate.
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We have served as the Company‘s auditor since 1997.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
Description of
the Matter
How We
Addressed the
Matter in Our
Audit
Joint Venture Consolidation Assessment
The Company accounted for certain investments in real estate joint ventures under the equity method of
accounting and consolidated certain other investments in real estate joint ventures. At December 31, 2020,
the Company’s investments in unconsolidated joint ventures was $3.8 billion and noncontrolling interests in
consolidated other partnerships was $26 million. As discussed in Note 2 to the consolidated financial
statements, for each joint venture, the Company evaluated the rights provided to each party in the venture to
assess the consolidation of the venture.
Auditing management’s joint venture consolidation analyses was complex and highly judgmental due to the
subjectivity in assessing which activities most significantly impact a joint venture’s economic performance
based on the purpose and design of the entity over the duration of its expected life and assessing which party
has rights to direct those activities. We tested the Company’s controls over the assessment of joint venture
consolidation. For example, we tested controls over management's review of the consolidation analyses for
newly formed ventures as well as controls over management's identification of reconsideration events which
could trigger modified consolidation conclusions for existing ventures.
To test the Company’s consolidation assessment for real estate joint ventures, our procedures included,
among others, reviewing new and amended joint venture agreements and discussing with management the
nature of the rights conveyed to the Company through the joint venture agreements as well as the business
purpose of the joint venture transactions. We reviewed management’s assessment of the activities that
would most significantly impact the joint venture’s economic performance and evaluated whether the joint
venture agreements provided participating or protective rights to the Company. We also evaluated
transactions with the joint ventures for events which would require a reconsideration of previous
consolidation conclusions.
Impairment of Commercial Real Estate Properties (Retail)
Description of
the Matter
At December 31, 2020, the Company’s commercial real estate properties, at cost totaled approximately $5.4
billion. As described in Note 2 to the consolidated financial statements, real estate properties are
periodically reviewed for impairment when circumstances indicate that the carrying value of a property may
not be recoverable. For the year ended December 31, 2020, the Company recognized $60.5 million of
depreciable real estate reserves and impairments.
Auditing the Company’s accounting for impairment of commercial real estate properties (retail) was
especially challenging and involved a high degree of subjectivity as a result of the assumptions and
estimates inherent in the determination of estimated future cash flows expected to result from the property’s
use and eventual disposition and the estimated fair value of the property. In particular, management’s
assumptions and estimates included estimated revenue and expense growth rates, discount rates and
capitalization rates, which were sensitive to expectations about future operations, market or economic
conditions, demand and competition.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over
the Company’s commercial real estate properties impairment process. This included testing of controls over
management's review of the significant assumptions and data inputs utilized in the estimation of expected
future cash flows and the determination of fair value.
To test the Company's accounting for impairment of commercial real estate properties, we performed audit
procedures that included, among others, evaluating the methodologies applied and testing the significant
assumptions discussed above and the underlying data used by the Company in its impairment analyses. We
held discussions with management about the current status of potential transactions and about
management’s judgments to understand the probability of future events that could affect the holding period
and other cash flow assumptions for the properties. In certain cases, we involved our valuation specialists to
assist in performing these procedures. We compared the significant assumptions used by management to
historical data and observable market-specific data. We also assessed management’s estimates and
performed sensitivity analyses of significant assumptions to evaluate the changes in estimated future cash
flows that would result from changes in the assumptions. In addition, we assessed information and events
subsequent to the balance sheet date to corroborate certain of the key assumptions utilized by management.
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/s/ Ernst & Young LLP
We have served as the Company‘s auditor since 1997.
New York, New York
February 26, 2021
Joint Venture Consolidation Assessment
Description of
The Company accounted for certain investments in real estate joint ventures under the equity method of
the Matter
How We
Addressed the
Matter in Our
Audit
accounting and consolidated certain other investments in real estate joint ventures. At December 31, 2020,
the Company’s investments in unconsolidated joint ventures was $3.8 billion and noncontrolling interests in
consolidated other partnerships was $26 million. As discussed in Note 2 to the consolidated financial
statements, for each joint venture, the Company evaluated the rights provided to each party in the venture to
assess the consolidation of the venture.
Auditing management’s joint venture consolidation analyses was complex and highly judgmental due to the
subjectivity in assessing which activities most significantly impact a joint venture’s economic performance
based on the purpose and design of the entity over the duration of its expected life and assessing which party
has rights to direct those activities. We tested the Company’s controls over the assessment of joint venture
consolidation. For example, we tested controls over management's review of the consolidation analyses for
newly formed ventures as well as controls over management's identification of reconsideration events which
could trigger modified consolidation conclusions for existing ventures.
To test the Company’s consolidation assessment for real estate joint ventures, our procedures included,
among others, reviewing new and amended joint venture agreements and discussing with management the
nature of the rights conveyed to the Company through the joint venture agreements as well as the business
purpose of the joint venture transactions. We reviewed management’s assessment of the activities that
would most significantly impact the joint venture’s economic performance and evaluated whether the joint
venture agreements provided participating or protective rights to the Company. We also evaluated
transactions with the joint ventures for events which would require a reconsideration of previous
consolidation conclusions.
Impairment of Commercial Real Estate Properties (Retail)
Description of
At December 31, 2020, the Company’s commercial real estate properties, at cost totaled approximately $5.4
the Matter
billion. As described in Note 2 to the consolidated financial statements, real estate properties are
periodically reviewed for impairment when circumstances indicate that the carrying value of a property may
not be recoverable. For the year ended December 31, 2020, the Company recognized $60.5 million of
depreciable real estate reserves and impairments.
Auditing the Company’s accounting for impairment of commercial real estate properties (retail) was
especially challenging and involved a high degree of subjectivity as a result of the assumptions and
estimates inherent in the determination of estimated future cash flows expected to result from the property’s
use and eventual disposition and the estimated fair value of the property. In particular, management’s
assumptions and estimates included estimated revenue and expense growth rates, discount rates and
capitalization rates, which were sensitive to expectations about future operations, market or economic
conditions, demand and competition.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over
the Company’s commercial real estate properties impairment process. This included testing of controls over
management's review of the significant assumptions and data inputs utilized in the estimation of expected
future cash flows and the determination of fair value.
To test the Company's accounting for impairment of commercial real estate properties, we performed audit
procedures that included, among others, evaluating the methodologies applied and testing the significant
assumptions discussed above and the underlying data used by the Company in its impairment analyses. We
held discussions with management about the current status of potential transactions and about
management’s judgments to understand the probability of future events that could affect the holding period
and other cash flow assumptions for the properties. In certain cases, we involved our valuation specialists to
assist in performing these procedures. We compared the significant assumptions used by management to
historical data and observable market-specific data. We also assessed management’s estimates and
performed sensitivity analyses of significant assumptions to evaluate the changes in estimated future cash
flows that would result from changes in the assumptions. In addition, we assessed information and events
subsequent to the balance sheet date to corroborate certain of the key assumptions utilized by management.
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Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of SL Green Realty Corp.
Opinion on Internal Control Over Financial Reporting
To the Partners of SL Green Operating Partnership, L.P.
Opinion on the Financial Statements
We have audited SL Green Realty Corp.'s internal control over financial reporting as of December 31, 2020, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, SL Green Realty Corp. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States)(PCAOB), the 2020 consolidated financial statements of the Company and our report dated February 26, 2021 expressed
an unqualified opinion thereon.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
We have audited the accompanying consolidated balance sheets of SL Green Operating Partnership, L.P. (the Operating
Partnership) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income,
capital and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial
statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating
Partnership at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States)(PCAOB), the Operating Partnership's internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 26, 2021 expressed an unqualified opinion thereon.
Adoption of ASU No. 2016-02
Adoption of ASU No. 2016-13
Basis for Opinion
As discussed in Note 2 to the consolidated financial statements, the Operating Partnership changed its method of accounting for
leases in 2019 due to the adoption of ASU No. 2016-02, Leases (Topic 842), and the related amendments.
As discussed in Note 2 to the consolidated financial statements, the Operating Partnership changed its method of accounting for
the measurement of credit losses on financial instruments in 2020 due to the adoption of ASU No. 2016-13, Financial
Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and the related amendments.
These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an
opinion on the Operating Partnership's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
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Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of SL Green Realty Corp.
Opinion on Internal Control Over Financial Reporting
To the Partners of SL Green Operating Partnership, L.P.
Opinion on the Financial Statements
We have audited SL Green Realty Corp.'s internal control over financial reporting as of December 31, 2020, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, SL Green Realty Corp. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States)(PCAOB), the 2020 consolidated financial statements of the Company and our report dated February 26, 2021 expressed
an unqualified opinion thereon.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
We have audited the accompanying consolidated balance sheets of SL Green Operating Partnership, L.P. (the Operating
Partnership) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income,
capital and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial
statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating
Partnership at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States)(PCAOB), the Operating Partnership's internal control over financial reporting as of December 31, 2020, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 26, 2021 expressed an unqualified opinion thereon.
Adoption of ASU No. 2016-02
As discussed in Note 2 to the consolidated financial statements, the Operating Partnership changed its method of accounting for
leases in 2019 due to the adoption of ASU No. 2016-02, Leases (Topic 842), and the related amendments.
Adoption of ASU No. 2016-13
As discussed in Note 2 to the consolidated financial statements, the Operating Partnership changed its method of accounting for
the measurement of credit losses on financial instruments in 2020 due to the adoption of ASU No. 2016-13, Financial
Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and the related amendments.
Basis for Opinion
These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an
opinion on the Operating Partnership's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
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We have served as the Operating Partnership's auditor since 2010.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
Description of
the Matter
How We
Addressed the
Matter in Our
Audit
Joint Venture Consolidation Assessment
The Operating Partnership accounted for certain investments in real estate joint ventures under the equity
method of accounting and consolidated certain other investments in real estate joint ventures. At December
31, 2020, the Operating Partnership’s investments in unconsolidated joint ventures was $3.8 billion and
noncontrolling interests in consolidated other partnerships was $26 million. As discussed in Note 2 to the
consolidated financial statements, for each joint venture, the Operating Partnership evaluated the rights
provided to each party in the venture to assess the consolidation of the venture.
Auditing management’s joint venture consolidation analyses was complex and highly judgmental due to the
subjectivity in assessing which activities most significantly impact a joint venture’s economic performance
based on the purpose and design of the entity over the duration of its expected life and assessing which party
has rights to direct those activities. We tested the Operating Partnership’s controls over the assessment of
joint venture consolidation. For example, we tested controls over management's review of the consolidation
analyses for newly formed ventures as well as controls over management's identification of reconsideration
events which could trigger modified consolidation conclusions for existing ventures.
To test the Operating Partnership’s consolidation assessment for real estate joint ventures, our procedures
included, among others, reviewing new and amended joint venture agreements and discussing with
management the nature of the rights conveyed to the Operating Partnership through the joint venture
agreements as well as the business purpose of the joint venture transactions. We reviewed management’s
assessment of the activities that would most significantly impact the joint venture’s economic performance
and evaluated whether the joint venture agreements provided participating or protective rights to the
Operating Partnership. We also evaluated transactions with the joint ventures for events which would
require a reconsideration of previous consolidation conclusions.
Impairment of Commercial Real Estate Properties (Retail)
Description of
the Matter
At December 31, 2020, the Operating Partnership’s commercial real estate properties, at cost totaled
approximately $5.4 billion. As described in Note 2 to the consolidated financial statements, real estate
properties are periodically reviewed for impairment when circumstances indicate that the carrying value of a
property may not be recoverable. For the year ended December 31, 2020, the Operating Partnership
recognized $60.5 million of depreciable real estate reserves and impairments.
How We
Addressed the
Matter in Our
Audit
Auditing the Operating Partnership’s accounting for impairment of commercial real estate properties (retail)
was especially challenging and involved a high degree of subjectivity as a result of the assumptions and
estimates inherent in the determination of estimated future cash flows expected to result from the property’s
use and eventual disposition and the estimated fair value of the property. In particular, management’s
assumptions and estimates included estimated revenue and expense growth rates, discount rates and
capitalization rates, which were sensitive to expectations about future operations, market or economic
conditions, demand and competition.
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over
the Operating Partnership’s commercial real estate properties impairment process. This included testing of
controls over management's review of the significant assumptions and data inputs utilized in the estimation
of expected future cash flows and the determination of fair value.
To test the Operating Partnership's accounting for impairment of commercial real estate properties, we
performed audit procedures that included, among others, evaluating the methodologies applied and testing
the significant assumptions discussed above and the underlying data used by the Operating Partnership in its
impairment analyses. We held discussions with management about the current status of potential
transactions and about management’s judgments to understand the probability of future events that could
affect the holding period and other cash flow assumptions for the properties. In certain cases, we involved
our valuation specialists to assist in performing these procedures. We compared the significant assumptions
used by management to historical data and observable market-specific data. We also assessed
management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the
changes in estimated future cash flows that would result from changes in the assumptions. In addition, we
assessed information and events subsequent to the balance sheet date to corroborate certain of the key
assumptions utilized by management.
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99
/s/ Ernst & Young LLP
We have served as the Operating Partnership's auditor since 2010.
New York, New York
February 26, 2021
Joint Venture Consolidation Assessment
Description of
The Operating Partnership accounted for certain investments in real estate joint ventures under the equity
the Matter
How We
Addressed the
Matter in Our
Audit
method of accounting and consolidated certain other investments in real estate joint ventures. At December
31, 2020, the Operating Partnership’s investments in unconsolidated joint ventures was $3.8 billion and
noncontrolling interests in consolidated other partnerships was $26 million. As discussed in Note 2 to the
consolidated financial statements, for each joint venture, the Operating Partnership evaluated the rights
provided to each party in the venture to assess the consolidation of the venture.
Auditing management’s joint venture consolidation analyses was complex and highly judgmental due to the
subjectivity in assessing which activities most significantly impact a joint venture’s economic performance
based on the purpose and design of the entity over the duration of its expected life and assessing which party
has rights to direct those activities. We tested the Operating Partnership’s controls over the assessment of
joint venture consolidation. For example, we tested controls over management's review of the consolidation
analyses for newly formed ventures as well as controls over management's identification of reconsideration
events which could trigger modified consolidation conclusions for existing ventures.
To test the Operating Partnership’s consolidation assessment for real estate joint ventures, our procedures
included, among others, reviewing new and amended joint venture agreements and discussing with
management the nature of the rights conveyed to the Operating Partnership through the joint venture
agreements as well as the business purpose of the joint venture transactions. We reviewed management’s
assessment of the activities that would most significantly impact the joint venture’s economic performance
and evaluated whether the joint venture agreements provided participating or protective rights to the
Operating Partnership. We also evaluated transactions with the joint ventures for events which would
require a reconsideration of previous consolidation conclusions.
Impairment of Commercial Real Estate Properties (Retail)
Description of
At December 31, 2020, the Operating Partnership’s commercial real estate properties, at cost totaled
the Matter
approximately $5.4 billion. As described in Note 2 to the consolidated financial statements, real estate
properties are periodically reviewed for impairment when circumstances indicate that the carrying value of a
property may not be recoverable. For the year ended December 31, 2020, the Operating Partnership
recognized $60.5 million of depreciable real estate reserves and impairments.
Auditing the Operating Partnership’s accounting for impairment of commercial real estate properties (retail)
was especially challenging and involved a high degree of subjectivity as a result of the assumptions and
estimates inherent in the determination of estimated future cash flows expected to result from the property’s
use and eventual disposition and the estimated fair value of the property. In particular, management’s
assumptions and estimates included estimated revenue and expense growth rates, discount rates and
capitalization rates, which were sensitive to expectations about future operations, market or economic
conditions, demand and competition.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over
the Operating Partnership’s commercial real estate properties impairment process. This included testing of
controls over management's review of the significant assumptions and data inputs utilized in the estimation
of expected future cash flows and the determination of fair value.
To test the Operating Partnership's accounting for impairment of commercial real estate properties, we
performed audit procedures that included, among others, evaluating the methodologies applied and testing
the significant assumptions discussed above and the underlying data used by the Operating Partnership in its
impairment analyses. We held discussions with management about the current status of potential
transactions and about management’s judgments to understand the probability of future events that could
affect the holding period and other cash flow assumptions for the properties. In certain cases, we involved
our valuation specialists to assist in performing these procedures. We compared the significant assumptions
used by management to historical data and observable market-specific data. We also assessed
management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the
changes in estimated future cash flows that would result from changes in the assumptions. In addition, we
assessed information and events subsequent to the balance sheet date to corroborate certain of the key
assumptions utilized by management.
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Report of Independent Registered Public Accounting Firm
To the Partners of SL Green Operating Partnership, L.P.
Opinion on Internal Control Over Financial Reporting
CONTROLS AND PROCEDURES
SL GREEN REALTY CORP.
Evaluation of Disclosure Controls and Procedures
We have audited SL Green Operating Partnership L.P.'s internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, SL Green Operating Partnership, L.P. (the
Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the 2020 consolidated financial statements of the Operating Partnership and our report dated February 26, 2021
expressed an unqualified opinion thereon.
Basis for Opinion
The Operating Partnership's management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
financial reporting was effective as of December 31, 2020.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange
Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise
required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the
Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily
substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of
the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its
disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and
disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and
the rules and regulations promulgated thereunder.
Management's Report on Internal Control over Financial Reporting
The Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such
term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of the
Company's management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an
evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the framework
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 Framework) (COSO). Based on that evaluation, the Company concluded that its internal control over
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
The effectiveness of the Company's internal control over financial reporting as of December 31, 2020 has been audited by
Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Company's internal control over financial reporting during the year ended
December 31, 2020 that has materially affected, or is reasonably likely to materially affect, its internal control over financial
reporting.
SL GREEN OPERATING PARTNERSHIP, L.P.
Evaluation of Disclosure Controls and Procedures
The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Operating Partnership's Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to
the Operating Partnership's management, including the Chief Executive Officer and Chief Financial Officer of the Operating
Partnership's general partner, as appropriate, to allow timely decisions regarding required disclosure based closely on the
definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a
control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will
detect or uncover failures within the Operating Partnership to disclose material information otherwise required to be set forth in
the Operating Partnership's periodic reports. Also, the Operating Partnership has investments in certain unconsolidated entities.
As the Operating Partnership does not control these entities, the Operating Partnership's disclosure controls and procedures with
respect to such entities are necessarily substantially more limited than those it maintains with respect to its consolidated
subsidiaries.
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Report of Independent Registered Public Accounting Firm
To the Partners of SL Green Operating Partnership, L.P.
Opinion on Internal Control Over Financial Reporting
CONTROLS AND PROCEDURES
SL GREEN REALTY CORP.
Evaluation of Disclosure Controls and Procedures
We have audited SL Green Operating Partnership L.P.'s internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, SL Green Operating Partnership, L.P. (the
Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the 2020 consolidated financial statements of the Operating Partnership and our report dated February 26, 2021
expressed an unqualified opinion thereon.
Basis for Opinion
The Operating Partnership's management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange
Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise
required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the
Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily
substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of
the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its
disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and
disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and
the rules and regulations promulgated thereunder.
Management's Report on Internal Control over Financial Reporting
The Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such
term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of the
Company's management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an
evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the framework
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 Framework) (COSO). Based on that evaluation, the Company concluded that its internal control over
financial reporting was effective as of December 31, 2020.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
The effectiveness of the Company's internal control over financial reporting as of December 31, 2020 has been audited by
Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Company's internal control over financial reporting during the year ended
December 31, 2020 that has materially affected, or is reasonably likely to materially affect, its internal control over financial
reporting.
SL GREEN OPERATING PARTNERSHIP, L.P.
Evaluation of Disclosure Controls and Procedures
The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Operating Partnership's Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to
the Operating Partnership's management, including the Chief Executive Officer and Chief Financial Officer of the Operating
Partnership's general partner, as appropriate, to allow timely decisions regarding required disclosure based closely on the
definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a
control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will
detect or uncover failures within the Operating Partnership to disclose material information otherwise required to be set forth in
the Operating Partnership's periodic reports. Also, the Operating Partnership has investments in certain unconsolidated entities.
As the Operating Partnership does not control these entities, the Operating Partnership's disclosure controls and procedures with
respect to such entities are necessarily substantially more limited than those it maintains with respect to its consolidated
subsidiaries.
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As of the end of the period covered by this report, the Operating Partnership carried out an evaluation, under the
supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the
Operating Partnership's general partner, of the effectiveness of the design and operation of the Operating Partnership's
disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Chief
Executive Officer and Chief Financial Officer of the Operating Partnership's general partner concluded that the Operating
Partnership's disclosure controls and procedures were effective to give reasonable assurances to the timely collection,
evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure
under the Exchange Act and the rules and regulations promulgated thereunder.
Management’s Report on Internal Control over Financial Reporting
The Operating Partnership is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f). Under the supervision and with the
participation of our management, including the Chief Executive Officer and Chief Financial Officer of the Operating
Partnership's general partner, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over
financial reporting as of December 31, 2020 based on the framework in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (COSO). Based on that evaluation,
the Operating Partnership concluded that its internal control over financial reporting was effective as of December 31, 2020.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
The effectiveness of the Operating Partnership's internal control over financial reporting as of December 31, 2020 has
been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears
herein.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Operating Partnership's internal control over financial reporting during the
year ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, its internal control over
financial reporting.
MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
SL GREEN REALTY CORP.
Our common stock trades on the New York Stock Exchange, or the NYSE, under the symbol "SLG." On February 25,
2021, the reported closing sale price per share of common stock on the NYSE was $67.46 and there were 392 holders of record
of our common stock.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
SL GREEN OPERATING PARTNERSHIP, L.P.
At December 31, 2020, there were 3,938,823 units of limited partnership interest of the Operating Partnership
outstanding and held by persons other than the Company, which received distributions per unit of the same amount and in the
same manner as dividends per share were distributed to common stockholders.
There is no established public trading market for the common units of the Operating Partnership. On February 25, 2021,
there were 54 holders of record and 73,517,930 common units outstanding, 69,350,829 of which were held by SL Green.
In order for SL Green to maintain its qualification as a REIT, it must make annual distributions to its stockholders of at
least 90% of its taxable income (not including net capital gains). SL Green has adopted a policy of paying regular quarterly
dividends on its common stock, and the Operating Partnership has adopted a policy of paying regular quarterly distributions to
its common units in the same amount as dividends paid by SL Green. Cash distributions have been paid on the common stock
of SL Green and the common units of the Operating Partnership since the initial public offering of SL Green. Distributions are
declared at the discretion of the board of directors of SL Green and depend on actual and anticipated cash from operations,
financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal
Revenue Code and other factors SL Green’s board of directors may consider relevant.
Each time SL Green issues shares of stock (other than in exchange for common units of limited partnership interest of the
Operating Partnership, or OP Units, when such OP Units are presented for redemption), it contributes the proceeds of such
issuance to the Operating Partnership in return for an equivalent number of units of limited partnership interest with rights and
preferences analogous to the shares issued.
ISSUER PURCHASES OF EQUITY SECURITIES
In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion
of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of
the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of
2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
At December 31, 2020, repurchases executed under the program were as follows:
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
share
$104.61
$99.03
$86.06
$62.39
8,105,881
9,468,617
4,465,857
8,538,995
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
During the year ended December 31, 2020, we issued 98,004 shares of our common stock to holders of units of limited
partnership interest in the Operating Partnership upon the redemption of such units pursuant to the partnership agreement of the
Operating Partnership. During the years ended December 31, 2019 and 2018, we issued 4,871 and 155,916 shares of our
common stock, respectively, to holders of units of limited partnership interest in the Operating Partnership upon the redemption
of such units pursuant to the partnership agreement of the Operating Partnership. The issuance of such shares was exempt from
registration under the Securities Act, pursuant to the exemption contemplated by Section 4(a)(2) thereof for transactions not
involving a public offering. The units were exchanged for an equal number of shares of our common stock.
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
SECURITIES
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103
As of the end of the period covered by this report, the Operating Partnership carried out an evaluation, under the
SL GREEN OPERATING PARTNERSHIP, L.P.
supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the
Operating Partnership's general partner, of the effectiveness of the design and operation of the Operating Partnership's
disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Chief
Executive Officer and Chief Financial Officer of the Operating Partnership's general partner concluded that the Operating
Partnership's disclosure controls and procedures were effective to give reasonable assurances to the timely collection,
At December 31, 2020, there were 3,938,823 units of limited partnership interest of the Operating Partnership
outstanding and held by persons other than the Company, which received distributions per unit of the same amount and in the
same manner as dividends per share were distributed to common stockholders.
There is no established public trading market for the common units of the Operating Partnership. On February 25, 2021,
evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure
there were 54 holders of record and 73,517,930 common units outstanding, 69,350,829 of which were held by SL Green.
In order for SL Green to maintain its qualification as a REIT, it must make annual distributions to its stockholders of at
least 90% of its taxable income (not including net capital gains). SL Green has adopted a policy of paying regular quarterly
dividends on its common stock, and the Operating Partnership has adopted a policy of paying regular quarterly distributions to
its common units in the same amount as dividends paid by SL Green. Cash distributions have been paid on the common stock
of SL Green and the common units of the Operating Partnership since the initial public offering of SL Green. Distributions are
declared at the discretion of the board of directors of SL Green and depend on actual and anticipated cash from operations,
financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal
Revenue Code and other factors SL Green’s board of directors may consider relevant.
Each time SL Green issues shares of stock (other than in exchange for common units of limited partnership interest of the
Operating Partnership, or OP Units, when such OP Units are presented for redemption), it contributes the proceeds of such
issuance to the Operating Partnership in return for an equivalent number of units of limited partnership interest with rights and
preferences analogous to the shares issued.
The effectiveness of the Operating Partnership's internal control over financial reporting as of December 31, 2020 has
ISSUER PURCHASES OF EQUITY SECURITIES
year ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, its internal control over
At December 31, 2020, repurchases executed under the program were as follows:
In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion
of shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of
the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of
2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020 (1)
Shares repurchased
Average price paid per
share
8,105,881
9,468,617
4,465,857
8,538,995
$104.61
$99.03
$86.06
$62.39
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
8,105,881
17,574,498
22,040,355
30,579,350
(1) Includes 63,374 shares of common stock repurchased by the Company in December 2020 that were settled in January 2021.
SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
During the year ended December 31, 2020, we issued 98,004 shares of our common stock to holders of units of limited
partnership interest in the Operating Partnership upon the redemption of such units pursuant to the partnership agreement of the
Operating Partnership. During the years ended December 31, 2019 and 2018, we issued 4,871 and 155,916 shares of our
common stock, respectively, to holders of units of limited partnership interest in the Operating Partnership upon the redemption
of such units pursuant to the partnership agreement of the Operating Partnership. The issuance of such shares was exempt from
registration under the Securities Act, pursuant to the exemption contemplated by Section 4(a)(2) thereof for transactions not
involving a public offering. The units were exchanged for an equal number of shares of our common stock.
under the Exchange Act and the rules and regulations promulgated thereunder.
Management’s Report on Internal Control over Financial Reporting
The Operating Partnership is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f). Under the supervision and with the
participation of our management, including the Chief Executive Officer and Chief Financial Officer of the Operating
Partnership's general partner, the Operating Partnership conducted an evaluation of the effectiveness of its internal control over
financial reporting as of December 31, 2020 based on the framework in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (COSO). Based on that evaluation,
the Operating Partnership concluded that its internal control over financial reporting was effective as of December 31, 2020.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears
herein.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Operating Partnership's internal control over financial reporting during the
MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER
financial reporting.
PURCHASES OF EQUITY SECURITIES
SL GREEN REALTY CORP.
Our common stock trades on the New York Stock Exchange, or the NYSE, under the symbol "SLG." On February 25,
2021, the reported closing sale price per share of common stock on the NYSE was $67.46 and there were 392 holders of record
of our common stock.
On December 4, 2020 our Board of Directors declared an ordinary dividend and a special dividend (together, "the Total
Dividend"). The Total Dividend was paid on January 15, 2021 to shareholders of record at the close of business on December
15, 2020 ("the Record Date"). Shareholders had the opportunity to elect to receive the Total Dividend in the form of all cash or
all stock, subject to proration if either option was oversubscribed.
To mitigate the dilutive impact of the common stock issued in the special dividend, the board of directors also authorized
a reverse stock split, which was effective after markets closed on January 20, 2021. On January 8, 2021, a committee of the
Board of Directors calculated the ratio for the reverse stock split of our issued and outstanding shares of common stock as
1.02918-for-1. After the issuance of the dividend and the completion of the reverse stock split, the number of shares of our
common stock outstanding was equivalent to the number of total shares outstanding on the Record Date (not including any
issuances or repurchases that occurred following the Record Date, as well as any fractional shares that would have been issued
but for which cash-in-lieu was paid). However, on a relative basis, some individual shareholders may have more shares of
SLG’s common stock, and some individual shareholders may have fewer shares of our common stock, depending on their
individual elections to receive cash or stock and as a result of the cash option being oversubscribed.
All share-related references and measurements including the number of shares outstanding, share prices, number of shares
repurchased, earnings per share, dividends per share, and share-based compensation awards, have been retroactively adjusted to
reflect the reverse stock split for all periods presented in this Annual Report on Form 10-K.
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The following table summarizes information, as of December 31, 2020, relating to our equity compensation plans
pursuant to which shares of our common stock or other equity securities may be granted from time to time.
Plan category
Number of securities
to be issued
upon exercise
of outstanding
options, warrants
and rights
(a)
Weighted
average
exercise
price of
outstanding
options,
warrants and
rights
(b)
Number of securities
remaining available
for future
issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(c)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Funds From Operations (FFO) and Funds Available for Distribution (FAD) Reconciliations
Below are reconciliations of net income attributable to our stockholders to FFO per share, Pro forma FFO per share, and FAD
attributable to our stockholders and unit holders for the years ended December 31, 2020, and 2019 (amounts in thousands,
except per share data).
Equity compensation plans approved by security holders (1)
3,502,613 (2) $
102.62 (3)
3,309,300 (4)
Funds From Operations (FFO) Reconciliation:
Equity compensation plans not approved by security
holders
Total
—
3,502,613
$
—
102.62
—
3,309,300
(1)
(2)
(3)
(4)
Includes our Fourth Amended and Restated 2005 Stock Option and Incentive Plan, Amended 1997 Stock Option and Incentive Plan, as amended, and
2008 Employee Stock Purchase Plan.
Includes (i) 784,995 shares of common stock issuable upon the exercise of outstanding options (784,022 of which are vested and exercisable), (ii) 10,750
restricted stock units and 140,775 phantom stock units that may be settled in shares of common stock (140,775 of which are vested), (iii) 2,252,911
LTIP units that, upon the satisfaction of certain conditions, are convertible into common units, which may be presented to us for redemption and
acquired by us for shares of our common stock (1,538,561 of which are vested).
Because there is no exercise price associated with restricted stock units, phantom stock units or LTIP units, these awards are not included in the
weighted-average exercise price calculation.
Balance is after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors'
Deferral Program and LTIP Units. The number of securities remaining available consists of shares remaining available for issuance under our 2008
Employee Stock Purchase Plan and Third Amended and Restated 2005 Stock Option and Incentive Plan.
Net income attributable to SL Green common stockholders
$
356,105 $
255,484
Add:
Less:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Gain (loss) on sale of real estate, net
Equity in net gain on sale of interest in unconsolidated joint venture/real estate
Purchase price and other fair value adjustments
Depreciable real estate reserves
Depreciation on non-rental real estate assets
Diluted weighted average shares and units outstanding (1)
Pro forma adjustment (2)
Pro forma diluted weighted average shares and units outstanding (2)
FFO per share (Diluted) (1)
FFO per share (Pro forma) (2)
FFO attributable to SL Green common stockholders and unit holders
$
562,725 $
605,701
(1)
During the first quarter of 2021, the Company completed a reverse stock split to mitigate the dilutive impact of stock issued for a special dividend paid
primarily in stock. Diluted weighted average common shares and units outstanding have been retroactively adjusted to reflect the reverse stock split.
(2)
During the first quarter of 2021, the Company completed a reverse stock split and a special dividend paid primarily in stock. GAAP requires the
weighted average common shares outstanding to be adjusted retroactively for all periods presented to reflect the reverse stock split. However, GAAP
requires shares issued pursuant to the special dividend be included in diluted weighted average common shares outstanding only from the date on which
the special dividend was declared. To facilitate comparison between the periods presented, the Company calculated Pro forma diluted weighted average
shares and units outstanding, which includes the shares issued pursuant to the special dividend from the beginning of the 2020 reporting periods.
FFO attributable to SL Green common stockholders and unit holders
$
562,725 $
605,701
Funds Available for Distribution (FAD) Reconciliation:
Add:
Less:
Non real estate depreciation and amortization
Amortization of deferred financing costs
Non-cash deferred compensation
FAD adjustment for joint ventures
Straight-line rental income and other non-cash adjustments
Second cycle tenant improvements
Second cycle leasing commissions
Revenue enhancing recurring CAPEX
Non-revenue enhancing recurring CAPEX
FAD attributable to SL Green stockholders and unit holders
$
455,167 $
406,964
Twelve Months Ended
December 31,
2020
2019
313,668
205,869
34,956
215,506
2,961
187,522
(60,454)
2,338
77,243
1,874
79,117
$
$
7.29 $
7.11 $
272,358
192,426
10,142
(16,749)
76,181
69,389
(7,047)
2,935
84,234
2,328
86,562
7.19
7.00
Twelve Months Ended
December 31,
2020
2019
2,338
11,794
43,199
54,528
23,195
53,730
10,230
610
22,596
2,935
11,653
42,395
99,349
22,616
60,202
28,287
7,820
37,446
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105
The following table summarizes information, as of December 31, 2020, relating to our equity compensation plans
pursuant to which shares of our common stock or other equity securities may be granted from time to time.
Number of securities
to be issued
upon exercise
of outstanding
options, warrants
and rights
(a)
Weighted
average
exercise
price of
outstanding
options,
warrants and
rights
(b)
Number of securities
remaining available
for future
issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(c)
Plan category
holders
Total
(1)
(2)
(3)
(4)
Equity compensation plans not approved by security
—
3,502,613
$
—
102.62
—
3,309,300
Includes our Fourth Amended and Restated 2005 Stock Option and Incentive Plan, Amended 1997 Stock Option and Incentive Plan, as amended, and
2008 Employee Stock Purchase Plan.
Includes (i) 784,995 shares of common stock issuable upon the exercise of outstanding options (784,022 of which are vested and exercisable), (ii) 10,750
restricted stock units and 140,775 phantom stock units that may be settled in shares of common stock (140,775 of which are vested), (iii) 2,252,911
LTIP units that, upon the satisfaction of certain conditions, are convertible into common units, which may be presented to us for redemption and
acquired by us for shares of our common stock (1,538,561 of which are vested).
Because there is no exercise price associated with restricted stock units, phantom stock units or LTIP units, these awards are not included in the
weighted-average exercise price calculation.
Balance is after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors'
Deferral Program and LTIP Units. The number of securities remaining available consists of shares remaining available for issuance under our 2008
Employee Stock Purchase Plan and Third Amended and Restated 2005 Stock Option and Incentive Plan.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Funds From Operations (FFO) and Funds Available for Distribution (FAD) Reconciliations
Below are reconciliations of net income attributable to our stockholders to FFO per share, Pro forma FFO per share, and FAD
attributable to our stockholders and unit holders for the years ended December 31, 2020, and 2019 (amounts in thousands,
except per share data).
Equity compensation plans approved by security holders (1)
3,502,613 (2) $
102.62 (3)
3,309,300 (4)
Funds From Operations (FFO) Reconciliation:
Net income attributable to SL Green common stockholders
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Less:
Gain (loss) on sale of real estate, net
Equity in net gain on sale of interest in unconsolidated joint venture/real estate
Purchase price and other fair value adjustments
Depreciable real estate reserves
Depreciation on non-rental real estate assets
Twelve Months Ended
December 31,
2020
2019
$
356,105 $
255,484
313,668
205,869
34,956
215,506
2,961
187,522
(60,454)
2,338
272,358
192,426
10,142
(16,749)
76,181
69,389
(7,047)
2,935
FFO attributable to SL Green common stockholders and unit holders
$
562,725 $
605,701
Diluted weighted average shares and units outstanding (1)
Pro forma adjustment (2)
Pro forma diluted weighted average shares and units outstanding (2)
FFO per share (Diluted) (1)
FFO per share (Pro forma) (2)
77,243
1,874
79,117
$
$
7.29 $
7.11 $
84,234
2,328
86,562
7.19
7.00
(1)
(2)
During the first quarter of 2021, the Company completed a reverse stock split to mitigate the dilutive impact of stock issued for a special dividend paid
primarily in stock. Diluted weighted average common shares and units outstanding have been retroactively adjusted to reflect the reverse stock split.
During the first quarter of 2021, the Company completed a reverse stock split and a special dividend paid primarily in stock. GAAP requires the
weighted average common shares outstanding to be adjusted retroactively for all periods presented to reflect the reverse stock split. However, GAAP
requires shares issued pursuant to the special dividend be included in diluted weighted average common shares outstanding only from the date on which
the special dividend was declared. To facilitate comparison between the periods presented, the Company calculated Pro forma diluted weighted average
shares and units outstanding, which includes the shares issued pursuant to the special dividend from the beginning of the 2020 reporting periods.
Funds Available for Distribution (FAD) Reconciliation:
Twelve Months Ended
December 31,
2020
2019
FFO attributable to SL Green common stockholders and unit holders
$
562,725 $
605,701
Add:
Non real estate depreciation and amortization
Amortization of deferred financing costs
Non-cash deferred compensation
Less:
FAD adjustment for joint ventures
Straight-line rental income and other non-cash adjustments
Second cycle tenant improvements
Second cycle leasing commissions
Revenue enhancing recurring CAPEX
Non-revenue enhancing recurring CAPEX
2,338
11,794
43,199
54,528
23,195
53,730
10,230
610
22,596
2,935
11,653
42,395
99,349
22,616
60,202
28,287
7,820
37,446
FAD attributable to SL Green stockholders and unit holders
$
455,167 $
406,964
104
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
Chairman of the Board of Directors and Chief
Executive Officer (Principal Executive Officer)
February 26, 2021
President and Director
February 26, 2021
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Marc Holliday
Marc Holliday
/s/ Andrew W. Mathias
Andrew W. Mathias
/s/ Stephen L. Green
Stephen L. Green
/s/ John H. Alschuler Jr.
John H. Alschuler, Jr.
/s/ Edwin T. Burton, III
Edwin T. Burton, III
/s/ John S. Levy
John S. Levy
/s/ Craig M. Hatkoff
Craig M. Hatkoff
/s/ Betsy S. Atkins
Betsy S. Atkins
/s/ Lauren B. Dillard
Lauren B. Dillard
Director
Director
Director
Director
Director
Director
Director
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant
thereunto duly authorized.
its behalf by
to be signed on
the undersigned,
report
has duly caused
this
SIGNATURES
Dated: February 26, 2021
SL GREEN REALTY CORP.
By:
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
________________________________________________________________________________________________________________________
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of SL Green Realty Corp.
hereby severally constitute Marc Holliday and Matthew J. DiLiberto, and each of them singly, our true and lawful attorneys and
with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Annual
Report on Form 10-K filed herewith and any and all amendments to said Annual Report on Form 10-K, and generally to do all
such things in our names and in our capacities as officers and directors to enable SL Green Realty Corp. to comply with the
provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to
said Annual Report on Form 10-K and any and all amendments thereto.
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106
107
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused
this
report
to be signed on
its behalf by
the undersigned,
thereunto duly authorized.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
SL GREEN REALTY CORP.
By:
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
Dated: February 26, 2021
________________________________________________________________________________________________________________________
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of SL Green Realty Corp.
hereby severally constitute Marc Holliday and Matthew J. DiLiberto, and each of them singly, our true and lawful attorneys and
with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Annual
Report on Form 10-K filed herewith and any and all amendments to said Annual Report on Form 10-K, and generally to do all
such things in our names and in our capacities as officers and directors to enable SL Green Realty Corp. to comply with the
provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to
said Annual Report on Form 10-K and any and all amendments thereto.
/s/ Marc Holliday
Marc Holliday
/s/ Andrew W. Mathias
Andrew W. Mathias
Chairman of the Board of Directors and Chief
Executive Officer (Principal Executive Officer)
February 26, 2021
President and Director
February 26, 2021
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Stephen L. Green
Stephen L. Green
/s/ John H. Alschuler Jr.
John H. Alschuler, Jr.
/s/ Edwin T. Burton, III
Edwin T. Burton, III
/s/ John S. Levy
John S. Levy
/s/ Craig M. Hatkoff
Craig M. Hatkoff
/s/ Betsy S. Atkins
Betsy S. Atkins
/s/ Lauren B. Dillard
Lauren B. Dillard
Director
Director
Director
Director
Director
Director
Director
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
106
107
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this
report
SIGNATURES
the undersigned,
has duly caused
to be signed on
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant
thereunto duly authorized.
its behalf by
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
/s/ Marc Holliday
Chairman of the Board of Directors and Chief
Executive Officer of SL Green, the sole general
partner of the Operating Partnership (Principal
February 26, 2021
Marc Holliday
Executive Officer)
/s/ Andrew W. Mathias
Andrew W. Mathias
President and Director of SL Green, the sole general
partner of the Operating Partnership
February 26, 2021
/s/ Matthew J. DiLiberto
Chief Financial Officer of
SL Green, the sole general partner of
the Operating Partnership (Principal Financial and
February 26, 2021
Matthew J. DiLiberto
Accounting Officer)
/s/ Stephen L. Green
Stephen L. Green
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ John H. Alschuler, Jr.
John H. Alschuler, Jr.
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ Edwin T. Burton, III
Edwin T. Burton, III
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ John S. Levy
John S. Levy
/s/ Craig M. Hatkoff
Craig M. Hatkoff
/s/ Betsy S. Atkins
Betsy S. Atkins
/s/ Lauren B. Dillard
Lauren B. Dillard
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
Director of SL Green, the sole general
partner of the Operating Partnership
February 26, 2021
Dated: February 26, 2021
SL GREEN OPERATING PARTNERSHIP, L.P.
By:
SL Green Realty Corp.
By:
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
________________________________________________________________________________________________________________________
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of SL Green Realty Corp.,
the sole general partner of SL Green Operating Partnership, L.P., hereby severally constitute Marc Holliday and Matthew J.
DiLiberto, and each of them singly, our true and lawful attorneys and with full power to them, and each of them singly, to sign
for us and in our names in the capacities indicated below, the Annual Report on Form 10-K filed herewith and any and all
amendments to said Annual Report on Form 10-K, and generally to do all such things in our names and in our capacities as
officers and directors to enable SL Green Operating Partnership, L.P. to comply with the provisions of the Securities Exchange
Act of 1934, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming
our signatures as they may be signed by our said attorneys, or any of them, to said Annual Report on Form 10-K and any and all
amendments thereto.
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108
109
Dated: February 26, 2021
________________________________________________________________________________________________________________________
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of SL Green Realty Corp.,
the sole general partner of SL Green Operating Partnership, L.P., hereby severally constitute Marc Holliday and Matthew J.
DiLiberto, and each of them singly, our true and lawful attorneys and with full power to them, and each of them singly, to sign
for us and in our names in the capacities indicated below, the Annual Report on Form 10-K filed herewith and any and all
amendments to said Annual Report on Form 10-K, and generally to do all such things in our names and in our capacities as
officers and directors to enable SL Green Operating Partnership, L.P. to comply with the provisions of the Securities Exchange
Act of 1934, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming
our signatures as they may be signed by our said attorneys, or any of them, to said Annual Report on Form 10-K and any and all
amendments thereto.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused
this
report
to be signed on
its behalf by
the undersigned,
thereunto duly authorized.
SIGNATURES
By:
By:
SL GREEN OPERATING PARTNERSHIP, L.P.
SL Green Realty Corp.
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
/s/ Marc Holliday
Marc Holliday
/s/ Andrew W. Mathias
Andrew W. Mathias
Chairman of the Board of Directors and Chief
Executive Officer of SL Green, the sole general
partner of the Operating Partnership (Principal
Executive Officer)
February 26, 2021
President and Director of SL Green, the sole general
partner of the Operating Partnership
February 26, 2021
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer of
SL Green, the sole general partner of
the Operating Partnership (Principal Financial and
Accounting Officer)
/s/ Stephen L. Green
Stephen L. Green
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ John H. Alschuler, Jr.
John H. Alschuler, Jr.
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ Edwin T. Burton, III
Edwin T. Burton, III
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
Director of SL Green, the sole general
partner of the Operating Partnership
/s/ John S. Levy
John S. Levy
/s/ Craig M. Hatkoff
Craig M. Hatkoff
/s/ Betsy S. Atkins
Betsy S. Atkins
/s/ Lauren B. Dillard
Lauren B. Dillard
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
February 26, 2021
Director of SL Green, the sole general
partner of the Operating Partnership
February 26, 2021
108
109
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Consent of Independent Registered Public Accounting Firm
Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
Exhibit 23.2
We consent to the incorporation by reference in the following Registration Statements:
(i)
Registration Statement (Form S-3 Nos. 333-70111, 333-30394, 333‑62434, 333-126058, 333-228887 and
333-223209) of SL Green Realty Corp. and the related Prospectuses;
(ii)
Registration Statement (Form S-8 Nos. 333-61555, 333-87485, 333-89964, 333-127014, 333-143721, 333-189362
and 333-212108) pertaining to the Stock Option and Incentive Plans of SL Green Realty Corp., and
(iii) Registration Statement (Form S-8 No. 333-148973) pertaining to the 2008 Employee Stock Purchase Plan of SL
Green Realty Corp.,
of our reports dated February 26, 2021, with respect to the consolidated financial statements of SL Green Realty Corp and the
effectiveness of internal control over financial reporting of SL Green Realty Corp., included in this Annual Report (Form 10-K)
of SL Green Realty Corp for the year ended December 31, 2020.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-228887) of SL Green
Operating Partnership, L.P. and in the related Prospectus of our reports dated February 26, 2021, with respect to the
consolidated financial statements of SL Green Operating Partnership, L.P., and the effectiveness of internal control over
financial reporting of SL Green Operating Partnership, L.P., included in this Annual Report (Form 10-K) for the year ended
December 31, 2020.
New York, New York
February 26, 2021
/s/ Ernst & Young LLP
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110
111
Consent of Independent Registered Public Accounting Firm
Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
Exhibit 23.2
We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-228887) of SL Green
Operating Partnership, L.P. and in the related Prospectus of our reports dated February 26, 2021, with respect to the
consolidated financial statements of SL Green Operating Partnership, L.P., and the effectiveness of internal control over
financial reporting of SL Green Operating Partnership, L.P., included in this Annual Report (Form 10-K) for the year ended
December 31, 2020.
New York, New York
February 26, 2021
/s/ Ernst & Young LLP
We consent to the incorporation by reference in the following Registration Statements:
(i)
Registration Statement (Form S-3 Nos. 333-70111, 333-30394, 333‑62434, 333-126058, 333-228887 and
333-223209) of SL Green Realty Corp. and the related Prospectuses;
(ii)
Registration Statement (Form S-8 Nos. 333-61555, 333-87485, 333-89964, 333-127014, 333-143721, 333-189362
and 333-212108) pertaining to the Stock Option and Incentive Plans of SL Green Realty Corp., and
(iii) Registration Statement (Form S-8 No. 333-148973) pertaining to the 2008 Employee Stock Purchase Plan of SL
Green Realty Corp.,
of our reports dated February 26, 2021, with respect to the consolidated financial statements of SL Green Realty Corp and the
effectiveness of internal control over financial reporting of SL Green Realty Corp., included in this Annual Report (Form 10-K)
of SL Green Realty Corp for the year ended December 31, 2020.
/s/ Ernst & Young LLP
New York, New York
February 26, 2021
110
111
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Exhibit 31.1
Exhibit 31.2
I, Marc Holliday, certify that:
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Realty Corp. (the “registrant”);
I have reviewed this annual report on Form 10-K of SL Green Realty Corp. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
1.
2.
3.
4.
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 26, 2021
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
Date: February 26, 2021
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
66073_10K_r3.indd 112
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112
113
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Realty Corp. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
I, Marc Holliday, certify that:
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
CERTIFICATION
Exhibit 31.1
Exhibit 31.2
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Realty Corp. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
5.
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 26, 2021
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
Date: February 26, 2021
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
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113
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Exhibit 31.3
Exhibit 31.4
I, Marc Holliday, certify that:
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
CERTIFICATION
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Operating Partnership, L.P. (the “registrant”);
I have reviewed this annual report on Form 10-K of SL Green Operating Partnership, L.P. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
1.
2.
3.
4.
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 26, 2021
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
of SL Green Realty Corp., the
general partner of the registrant
Date: February 26, 2021
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the registrant
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114
115
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Operating Partnership, L.P. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
I, Marc Holliday, certify that:
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
CERTIFICATION
Exhibit 31.3
Exhibit 31.4
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of SL Green Operating Partnership, L.P. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
5.
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date: February 26, 2021
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
of SL Green Realty Corp., the
general partner of the registrant
Date: February 26, 2021
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the registrant
114
115
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CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
Exhibit 32.2
In connection with the Annual Report of SL Green Realty Corp. (the “Company”) on Form 10-K as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chairman and Chief Executive Officer of the
Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
In connection with the Annual Report of SL Green Realty Corp. (the “Company”) on Form 10-K as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial Officer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
February 26, 2021
1.
2.
Act of 1934; and
operations of the Company.
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
February 26, 2021
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4/9/21 9:22 AM
116
117
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
Exhibit 32.2
In connection with the Annual Report of SL Green Realty Corp. (the “Company”) on Form 10-K as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chairman and Chief Executive Officer of the
Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
In connection with the Annual Report of SL Green Realty Corp. (the “Company”) on Form 10-K as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial Officer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
February 26, 2021
2002, that:
1.
2.
Act of 1934; and
operations of the Company.
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
February 26, 2021
116
117
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4/9/21 9:22 AM
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.3
Exhibit 32.4
In connection with the Annual Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-K as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chairman and Chief
Executive Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
In connection with the Annual Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-K as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial
Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
Act of 1934; and
1.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Operating Partnership.
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Operating Partnership.
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
of SL Green Realty Corp., the
general partner of the Operating Partnership
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the Operating Partnership
February 26, 2021
February 26, 2021
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4/9/21 9:22 AM
118
119
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.3
Exhibit 32.4
In connection with the Annual Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-K as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chairman and Chief
Executive Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
In connection with the Annual Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-K as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial
Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Operating Partnership.
1.
2.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Operating Partnership.
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
of SL Green Realty Corp., the
general partner of the Operating Partnership
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the Operating Partnership
February 26, 2021
February 26, 2021
118
119
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Financial Highlights
( All data as of 12/31/20 unless otherwise noted)
23
years listed
38.2m
total square feet (1)
$7.11
ffo per share
$3.64
annual dividend
per share
93.4%
$14.5b
manhattan same-store
leased occupancy
enterprise value
$1.6b
88
combined revenues
properties (1)
$1.7b
liquidity (2)
98.1%
collection from
(3)
office tenants
32.6m
shares repurchased
(1) Includes DPE interests.
(2) Includes consolidated cash,
marketable securities and undrawn
capacity on the Company’s
unsecured revolving credit facility;
excludes SLG share of unconsolidated
JV cash and cash equivalents.
(3) Reflects 2020 billed amounts
collected as of 3/31/21.
Corporate Directory
Board of Directors
Executive Officers
Registrar & Transfer Agent
Marc Holliday
Chairman & Chief Executive Officer
Marc Holliday
Chairman & Chief Executive Officer
Andrew W. Mathias
President
Stephen L. Green
Chairman Emeritus
John H. Alschuler, Jr.
Lead Independent Director;
Chair of the Board,
HR&A Advisors Inc.
Edwin T. Burton, III
Professor of Economics,
University of Virginia
John S. Levy
Private Investor
Craig M. Hatkoff
Co-founder, Tribeca Film Festival;
Chairman, Turtle Pond Publications, LLC
Betsy Atkins
CEO & Founder, Baja Corporation
Lauren B. Dillard
Executive Vice President –
Head of Investment Intelligence,
Nasdaq
Andrew W. Mathias
President
Matthew J. DiLiberto
Chief Financial Officer
Andrew S. Levine
Chief Legal Officer,
General Counsel
Counsel
Skadden, Arps, Slate,
Meagher & Flom LLP
New York, NY
Auditors
Ernst & Young LLP
New York, NY
5-Year Total Return to Shareholders
(Includes reinvestment of dividends)
( Based on $100 investment)
$250
200
150
100
50
‘15
‘16
‘17
‘18
‘19
‘20
SL GREEN REALTY CORP. S&P 500 DOW JONES INDUSTRIALS INDEX MSCI U.S. REIT INDEX
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Computershare Investor Services
P.O. Box 505000
Louisville, KY 40233-5000
866-230-9138
www.computershare.com/investor
Stock Listing
NYSE Symbol:
SLG, SLG PrI
Investor Relations
One Vanderbilt Avenue
New York, NY 10017
Tel: 212-216-1654
E-mail:
investor.relations@slgreen.com
www.slgreen.com
Annual Meeting
Tuesday, June 8, 2021,
12:00 p.m. ET
The Annual Meeting will
be held remotely.
www.virtualshareholder
meeting.com/SLG2021
Executive Offices
One Vanderbilt Avenue
New York, NY 10017
Tel: 212-594-2700
Fax: 212-216-1785
www.slgreen.com
20
20
SL GREEN
annual
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SL GREEN REALTY CORP.
One Vanderbilt Avenue
New York, NY 10017
212.594.2700
www.slgreen.com