SL Green
Realty Corp.
New Summits
2021 Annual Report
1
NEW
YORK
CITY
IS BACK!
Financial Highlights (All data as of 12/31/21 unless otherwise noted)
YEARS LISTED >
24
PROPERTIES (1) >
73
FFO PER SHARE >
$6.63
COMBINED REVENUES >
$1.4B
TOTAL OFFICE TENANTS >
869
ENTERPRISE VALUE >
$15.3B
TOTAL SQUARE FEET (1) >
34.9M
ANNUAL DIVIDEND PER SHARE >
$3.73
MANHATTAN PROPERTIES WITH GREEN
BUILDING DESIGNATION >
91.0%
MANHATTAN SAME-STORE LEASED
OCCUPANCY >
93.0%
(1) Includes interests in debt and preferred equity investments and suburban properties.
1
which continues to trend in the right direction
as businesses feel increasingly confident about
the City coming back to life. Jobs in New York’s
private sector rose by 306,300 year-over-year
in January 2022, and office-using jobs are following
suit, with positive movement almost every single
month since June 2020, notwithstanding a more
flexible hybrid work model. The U.S. economy has
now recovered more than 90 percent of the
22 million jobs lost at the peak of the pandemic’s
lockdowns in the spring of 2020, adding
431,000 jobs in March — a far swifter rebound
than forecasters initially expected. As finance,
tech, information and business services sectors
grow, office-using employment will follow. With
more than 8.3 million square feet of office space
requirements currently circulating in the market,
we expect 2022 to lead us to a full recovery by
2023, and inevitably, new highs will be achieved.
New York is also benefiting from its recent
investments and incentives aimed at incubating
emerging growth companies. Venture capitalists
are establishing offices in New York to invest in the
City’s dynamic and flourishing start-up and early-
stage tech companies. We have 103 unicorns —
firms with more than $1 billion of private market
cap valuation — with cumulative valuations of
$243.5 billion. New York City is now tied for third
place on Forbes’ list of 100 global tech investors’
preferred headquarters locations, right behind
Silicon Valley and Menlo Park. And New York
City is establishing itself as the location of choice
for fintech and cryptocurrency companies.
We’re thrilled to see that the growth in these
industries is translating directly into leasing activity,
with most of the major tenants in the market
right now coming from the finance, tech, legal or
business services sector. Of course, we’re working
hard to capture this activity, and the numbers
reflect that we’re getting more than our share.
The proof starts with our market-leading
occupancy rates. We’ve always prided ourselves
in outperforming the market in the daily battle
for high-quality tenants. With over 4.0 million
square feet of leasing in our office portfolio
since the beginning of 2020, our occupancy
of approximately 93 percent, which is already
more than 10 percentage points higher than
the overall Manhattan office market, is expected
to rise in 2022, a goal we are committed to.
When you invest in SL Green, that’s what you’re
getting — consistent outperformance, year after
year, in good markets and bad.
In just the first 3.5 months of 2022, we signed
nearly 900,000 square feet of leases, including
the blockbuster announcement of IBM’s
328,000-square-foot, long-term anchor lease
at our transformative One Madison Avenue
development. But even after all that activity, we
still have an active pipeline of leases totaling
another almost 1.0 million square feet, which we
hope and expect to capitalize upon throughout
the year. With One Vanderbilt Avenue now nearly
MARC HOLLIDAY
Chairman & Chief Executive Officer
ANDREW W. MATHIAS
President
Dear Shareholders,
There is an unmistakable energy building in
New York. As the weather warms and we move
beyond a difficult winter, the telltale signs
of a city reemerging are everywhere. New York
feels like itself again, buzzing with activity and
optimism; a kineticism we haven’t seen in a long
while. New York City is once again showing
its resiliency — as it has time and time again —
proving the naysayers wrong and welcoming
back residents, workers and tourists alike.
Pandemic restrictions have been all but eliminated,
allowing for a return to normalcy at a much faster
rate than most other international gateway cities.
The streets are alive, signs of the recovery are
everywhere, and New York is an event town again.
Our much beloved Broadway shows are at over
80 percent capacity and selling 225,000 tickets
per week, while the Yankees and Mets had their
opening days in early April playing to sold out
crowds. The allure of living in this extraordinary
city is as strong as ever, as evidenced by New York
City’s apartment occupancy reaching over
98 percent and condominium sales transactions
hitting record levels.
It is once again hard to get reservations at
Midtown and Downtown restaurants, as residents
flock back to their favorite eating spots, buoyed
by an extension of alcohol-to-go policies, and
tourists return to New York City in droves —
making the City the number one domestic tourist
destination for the first time since the pandemic
started, according to TripAdvisor. NYC & Company
has increased its forecasts, expecting nearly
57 million visitors to NYC in 2022, just 18 percent
behind its prior peak, and is projecting a return
to 2019 visitation levels in 2024.
And as tourism regains its footing, so too will
New York’s hotels, where occupancy has been
climbing steadily, with three quarters of the
city’s available hotel rooms filled in the week that
ended March 19. While still below 2019 levels,
the total occupancies are expected to increase.
2
This momentum led CBRE to revise its forecasts
for hotel RevPAR in 2022, predicting a return
to 2019 levels by the third quarter of this year.
New York is bustling again, and it’s getting better
every single day.
The biggest beneficiary of the City’s reawakening
is a resurgent Midtown, the part of Manhattan
that we call home and where substantially all
of our investments reside. After several years of
growth occurring in other areas of Manhattan,
that trend has reversed itself as Midtown has
been reinvented with a series of transformative
projects and new openings, highlighted by
One Vanderbilt and Le Pavillon, and again is
asserting its dominant position as THE place of
choice for leading companies. Midtown leasing
velocity in the first quarter totaled 5.2 million
square feet, an increase of 35.8 percent from
the first quarter of 2021.
With the monumental opening of SUMMIT
One Vanderbilt last October, we now have,
arguably, the greatest barometer of Midtown’s
resurgence at our disposal. SUMMIT opened to
sellout crowds throughout most of the holiday
season and took a modest dip over the winter
as the combination of weather and Omicron
impacted visitation. However, now with spring
upon us, attendance is rebounding to holiday
levels and we are thrilled with the global
phenomenon that the SUMMIT has become.
Midtown’s future is incredibly bright. The good
news isn’t just in the streets. It’s in the boardrooms,
on the trading floors and in the technology labs.
Most segments of New York’s business community
are as busy as I can recall ever seeing, and many
sectors are generating record profits in a highly
charged business and consumer environment
fanned by stimulus and spending. Finance and
technology sectors, accounting and law firms,
media, film and advertising companies, health care
and life sciences — all these industries report
being as busy as they’ve ever been, and that is
driving a jobs recovery in New York.
Our confidence is also supported by good
news on New York’s private sector job growth,
SL GREEN ANNUAL REPORT 2021 fully leased, the demand we are experiencing
is not just for new space, but rather for highly
improved, amenitized and well-located space
that comprises the entirety of our portfolio.
We have worked incredibly hard over the past
five years to transform our portfolio into the
force that it is today, focused solely on the best
buildings in the best locations, with all the
attributes that tenants have come to demand —
health and wellness, exceptional amenities,
great location and high design. In 2021, we were
rewarded for our efforts with a 27 percent TRS,
the third highest of all publicly traded office REITs,
and we hope to extend that performance in 2022.
Contributing to the City’s momentum is new,
engaged leadership at the State and City level,
working together to help bring about positive
change at a time when New York needed it most.
Governor Kathy Hochul and Mayor Eric Adams
have been relentless advocates for New York
and its return to normal, lifting mask mandates
and joining together to urge New Yorkers back
to the office to support local businesses and
restaurants that depend on in-office workers.
Many of New York’s major employers followed
suit and are calling employees back to the office
where business is done most effectively and
efficiently — with face-to-face interactions,
mentorship, advancement, and relationship-
building — all in purpose-built environments that
foster creativity, collaboration and congeniality.
Politics in New York can be very cyclical, especially
when it comes to interactions with the business
community. The current leadership has made clear
that it wants to work with the private sector
to create job opportunities, solve the affordable
housing crisis, achieve environmental goals
and drive economic growth to help fund education,
infrastructure improvements and social initiatives.
Governor Hochul and Mayor Adams have
brought an intense focus on criminal reform and
public safety at a critical moment, and we
share their vision for a safer, more sustainable
and equitable city. They have signaled strong
commitment for an economic recovery plan by
pursuing an ambitious economic development
agenda included within the State’s $220 billion
budget and the City’s nearly $100 billion budget,
SUMMIT Experience at One Vanderbilt
each a record amount supported by federal
stimulus dollars.
on major construction projects — and we were
thrilled to help support their good work.
Throughout the pandemic, our belief in our City
never vacillated — this is the City we love — but now
there can be no question that New York is back!
PLAYING OUR PART IN NY’S COMEBACK
As always, we at SL Green are doing our part
to support and accelerate New York’s comeback,
and 2021 was no exception.
We start by showing up, which in 2021 was a major
statement. Our team has been 100 percent in the
office, 5 days a week, since the State allowed it in
June 2020. That’s critical to our success and the
milestones we achieved last year.
In May, we opened Daniel Boulud’s Le Pavillon
at One Vanderbilt, signaling the return of New York’s
restaurant scene. We knew the demand was
there, but we’ve been blown away by the reaction —
every dinner table has been taken since opening,
with long wait lists. The restaurant is now
open for lunch, and we are doing great business
during the days too, even though the Midtown
workforce is not yet fully back.
In October, we upped the ante, celebrating the
launch of SUMMIT One Vanderbilt, an immersive
experience unlike anything else in the world. This
was another major milestone for New York, with
then Mayor-elect Eric Adams joining us to cut the
ribbon, signaling to domestic and global tourists
alike that the city is open for entertainment, and
new and exciting things can come out of the most
trying of circumstances.
SUMMIT is already an enormous global success,
one of the most photographed locations in all
of New York and the hottest new spot to propose
marriage! We’ve been catering to crowds well in
excess of our ramp-up expectations, with many
days completely sold out — notwithstanding we
are not yet back to full tourism levels — further
proof that people from around the country and
world want to be here.
We also continued to give back to the community,
especially the first responders who helped the
City through the pandemic. We closed the year
at Le Pavillon with the second annual gala for
the Food1st Foundation, which raised more than
$750,000 at this one event. We created the
Food1st Foundation with Daniel Boulud at
the start of the pandemic to support struggling
restaurants and feed frontline workers and
New Yorkers in need. These challenges still exist
and we are proud to have delivered more than
700,000 meals to date, with an expectation that
we will exceed 1 million total meals by the end
of 2022.
And over the summer Matt DiLiberto and I — and
the entire SL Green team — were honored by
the FDNY Foundation, helping to raise a record-
breaking $4.2 million. We count on the FDNY
not just to protect lives and property in the city —
they are a vital partner to us every day, especially
LOOKING AHEAD
This year more than ever we’re ready to look
forward, to move beyond the challenges of the
pandemic and to embrace the exciting new
expectations that tenants and their employees
now have about the future of work.
Deliver on Amenity and Experience
Our belief in the future of office is stronger than
ever, but we know that success requires constant
reinvention and creative response to an ever-
changing market. To that end, we believe that one
lasting impact of the pandemic is the ongoing
rapid transformation in work culture that began
a decade ago: a heightened desire for healthy,
amenitized, hospitality-focused work environments.
Five to ten years ago, amenities were seen as merely
supplemental to the workplace. Approximately
five years ago, we began seeing a shift towards
a greater incorporation of amenities into the
workplace as companies recognized this as a way
to both optimize business and recruit and retain
talent. Now, within the last two years as a result of
the pandemic, amenities have become a driver of
business as top performing organizations recognize
the value of the workplace as a destination for
their people — a place that merges the best of
residential, hospitality, and traditional office
features into a contemporary, agile model that
fosters culture and community.
SL Green has embraced this trend over the past
several years through a combination of curated
retail leasing and the creation of best-in-class
amenity spaces within most of our larger properties.
Examples include the 10,000-square-foot
Park House amenity lounge at 100 Park Avenue,
which features an upscale cafe with fireplace,
meeting rooms for up to 70 people, private
fitness training room, golf simulator, pool table
and executive shower rooms. Graybar 19 is a
spectacular new 18,000-square-foot conference
center at the Graybar Building with an outdoor
terrace and coffee bar that can accommodate
everything from small meetings to 30-person
training sessions or 20-person boardroom
meetings. Our retail leasing strategy focuses on
an inclusion of uses valued by our office tenants
such as small cafes, both upscale and fast casual
dining, fitness centers and concierge-style medical
practices. The scope and type of amenities serving
our buildings is a carefully considered combination
dependent upon a particular building’s size, location
and tenant profile.
The platinum standard is One Vanderbilt Avenue,
where experience, hospitality and amenity are
infused into every aspect of the building. That
starts with our world-class Vandy Club on the
building’s third floor — featuring La Terrace,
which is a club-style lounge, complemented
with a beautifully landscaped outdoor terrace
overlooking Grand Central Terminal, bistro
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managed by chef Daniel Boulud together with
two executive travel shower rooms and a state-
of-the-art conference facility with 140-seat
auditorium, 40-seat boardroom and 30-seat
training room. The tenant experience starts
with a warm greeting from our lobby staff and
extends throughout the entire building, which
is why we have invested in Daniel Boulud’s
Le Pavillon fine dining restaurant and a
soon-to-open upscale omakase sushi bar.
Member-only primary care medicine is provided
by One Medical and the highly acclaimed
SUMMIT One Vanderbilt is at the top of the
building. One Vanderbilt is truly a destination,
and every bit of it is a value-add for tenants.
We are incorporating the same comprehensive
approach to our newest development One Madison
Avenue, where amenities will include a hotel-style
lounge, new artisanal food market, a spectacular
10,000-square-foot rooftop garden and event
space and a great restaurant. A recent lease with
Chelsea Piers Fitness brings a best-in-class
56,000-square-foot fitness club to the building.
Additional retail leasing is expected to include
additional exciting food and beverage offerings.
Other ongoing building redevelopments include
750 Third Avenue, where our plan features a tenant-
only bar and lounge with direct connection to
the building lobby and a lower-level conference
center providing space for both boardroom and
120-seat auditorium meetings. 885 Third Avenue’s
new lobby will include a European-style coffee bar
operated by Chef Boulud and a spa-quality fitness
center available only to building tenants. Similarly,
the new lobby at 919 Third Avenue was designed in
a warm, hospitality style and is anchored with an
upscale coffee bar with seating that flows into both
the lobby and outdoor plaza areas.
Additionally, we’ve taken our approach toward
amenities one step further by creating a dedicated
hospitality team recruited from the four-star hotel
and restaurant industries. This team of hospitality
professionals oversees the management of all
amenity offerings and provides a concierge level
of service helping our tenants with all the details
necessary to maximize every experience.
Focus on Development and Redevelopment
With the enhanced focus on amenity and
experience comes a premium on new development
and redevelopment of well-located assets.
We will continue to transition our portfolio toward
new development, building on the success of
One Vanderbilt and One Madison. The flight to
quality we’ve seen this year is just beginning,
as tenants are willing to pay a premium for the
newest and best office space. Ultimately, as
the pandemic evolves, we want our portfolio
and business to be able to both withstand,
and capitalize on, all market conditions.
There’s no better proof of concept of our strategy
than the massive success of One Vanderbilt,
which is fully stabilized and already nearly
4
Global technology leader IBM signs 328,000-square-foot, 16-year lease at One Madison
97 percent leased. The awards are rolling in —
ULI Excellence in Development award, Commercial
Observer’s Smart Building of the year — a total
of 25 awards won already, with more to come.
The 10-year, fixed-rate $3 billion financing we
closed last summer was headline news and
repatriated all of our equity.
Over the course of the past year, we launched
several active development and redevelopment
projects. On the development side, buildings
such as One Madison, 760 Madison, 7 Dey, and
15 Beekman center around modern and luxurious
design, curated amenities, and outdoor space
offerings among other core considerations, resulting
in exceptional performance. Since launching last
year, SL Green’s new residential development, 7 Dey,
has seen more than 90 percent of market rate
units leased, 133 leases executed, and completed
a total of 710 leasing tours.
On the redevelopment end, 919 Third Avenue,
750 Third Avenue, 885 Third Avenue are all being
repositioned to include new lobbies, modern
amenities and healthy workplace improvements
that will make them among the best buildings
on 3rd Avenue and meet the tenant demand for
amenity and healthy workplace convergence.
Increase Asset Management Opportunities
SL Green’s multipronged approach to asset
management involves transitioning towards an
“asset-light” business model to help drive a higher
return on capital, with a new focus on smaller equity
positions with more favorable returns and upside.
As we witness a significant demand for best-in-
class New York City real estate and premier
sponsorship, SL Green has strategically capitalized
on the global institutional demand for these
assets and the SL Green platform. As such, SL Green
has grown its institutional partnerships from
around the globe to encompass North America,
Europe, Asia, and the Middle East.
Another strategic play for us is finding more
opportunities to bring our extraordinary team and
integrated platform into investment situations
where we can earn significant fees and returns
by investing alongside large, majority-owner
institutional accounts. In the past you’ve seen
us typically take equity stakes from 50 to
100 percent of a project; now we’ll be looking for
more opportunities where we invest anywhere
between 15 to 30 percent of the equity, while
maintaining joint governance and overseeing
leasing and management, so that we can execute
on projects to the benefit of our shareholders
and investment partners. We think this is a better,
less capital-intensive model that allows every
dollar invested to provide larger relative returns,
while further diversifying our asset base and
freeing up capital for development pipeline, new
investments, debt repayment and share repurchases.
We continue to be active buyers in the marketplace,
focusing on high-quality assets that are superbly
located in the heart of the City. To that end, in
the second quarter of 2022, we announced
the acquisition of 450 Park Avenue. Located
at the highly coveted corner of 57th Street and
Park Avenue, the 337,000-square-foot Class A
asset is a prime example of our investment
thesis at work. We expect significant interest
not only from tenants, but also partners who
will capitalize this deal with us as we grow our
investment management platform.
Diversify Our Platform
This past year, SL Green continued to diversify
our platform with the successful opening of
SUMMIT One Vanderbilt in fall 2021. SUMMIT
One Vanderbilt set out to reimagine New York
City during a particularly vulnerable period for
the City, and in record time delivered on creating
a truly unique destination for New Yorkers
and welcomed back visitors from around the
world. In just 149 days of operation, SUMMIT
One Vanderbilt generated over 550,000 total
visitors from 57 countries around the globe,
quickly becoming the hottest new attraction in
New York City — within the most competitive
landscape for entertainment attractions.
SL GREEN ANNUAL REPORT 2021 The success of SUMMIT builds on our experience
partnering with Chef Daniel Boulud at
One Vanderbilt. Le Pavillon’s nature-oriented
design brings a peaceful oasis to the bustling
Midtown area, and has contributed to the
diversification of One Vanderbilt as a cultural
landmark. Since then, Le Pavillon has achieved
a 4-star rating from Forbes Travel Guide and has
been named the most important new restaurant
in New York history by the New York Post.
Moving forward, to keep improving and
strengthening our balance sheet, we will continue
to be creative in unearthing value from our
assets. SUMMIT is a perfect example of amplifying
an already world-class building to be even
more attractive to investors and visitors alike.
We see a similar opportunity in the potential
to bring a new casino to Times Square. This
is a tremendous opportunity to develop and
operate a destination and entertainment venue
anticipated to generate billions of dollars in
revenue to the State and the City. The recently
enacted State budget provides for up to three
casino gaming licenses to be issued downstate
in 2022, and we intend to compete for one of
them. A casino in Times Square will generate
substantial tax revenues for the State and City,
create thousands of good paying jobs, bring
incremental tourism to Manhattan, and benefit
surrounding Times Square restaurants, hotels,
retail and Broadway.
Lead the Way on ESG
The core principles of ESG — environmental,
social and corporate governance — have always
been integral to SL Green’s business model.
As ESG has become an increasing focus of
our shareholders, investment partners and
government leaders, SL Green has reasserted
its place as a leader at the forefront of these
critical issues. I am committed to maintaining
and growing our leadership role in this area,
and our entire team is focused on applying
these principles to impact every part of our
business: assets, tenants, community, employees,
risk management and governance.
culture and strives to maintain our position as
a model of corporate citizenship. We were proud
to be certified as a “Great Place to Work” last
month, recognizing the unique commitment
of our team and the special collaboration
and partnership that exists at the Company.
Our award-winning sustainability initiatives
help minimize environmental impact, increase
resiliency, engage with the local community,
and create long-term value across our industry-
leading portfolio. Our recently announced
partnership with IBM, our new anchor tenant at
One Madison, centers around its innovative
Envizi technology platform. Envizi will allow us
to better track and further streamline the
environmental performance of our portfolio,
helping to better identify efficiency opportunities
and assess sustainability risk.
On the governance front, we are committed to
transparent disclosure with stakeholders and
ensuring we achieve our collective vision of model
corporate citizenship. We were thrilled to welcome
Carol Brown, a long-tenured real estate law
professor, as an Independent Director on our Board
of Directors in March and will continue to bring
new expertise and experience to our leadership.
Realize Embedded Value
We were leaders in 2020 in making the market
for investments in Manhattan commercial assets,
and we picked up right where we left off in 2021.
Our seven major office sales in 2021 — ranging
from bringing on new JV partners at One Madison
to complete divestment of assets like 590 5th
Avenue and 707 11th Avenue — showed that the
demand for well-located office and retail space
remains strong.
We expect to be active again in 2022, with
opportunities to derive value from 110 Greene
Street, 609 5th Avenue, 100 Church Street
and others as the investment market remains
strong and will provide us with the capital
needed to take on exciting new investments and
continue to invest in debt reduction and our
share buyback program.
SL Green has garnered industry recognition for
our market-leading achievement and workplace
Invest in Ourselves
Finally, as has been the case for the past several
years, we intend to continue investing in the best
value we see in the market — our own stock.
Looking at our portfolio today, we are lean, strong
and highly concentrated on core, prime assets.
Over the past several years we’ve reduced or
dramatically eliminated ancillary business lines,
selling off our suburban portfolio, minimizing
our retail and residential portfolios, and trimming
back our DPE book. Our core office portfolio
remains a similar size, but we’ve replaced smaller,
non-core assets with a small number of bigger,
higher quality properties. And new development
is now a much bigger component of our portfolio
and will only grow as One Madison moves
toward completion.
Second annual Food1st Gala featuring
Dr. Elvis Francois: The Singing Surgeon
Looking back to 2018 the shift is stark and
impressive. At that time, we had 110 properties
and about 50 million feet owned or as collateral
interest, spread across 5 different business lines.
And we said to you, our shareholders, that we
were going to get lean, get focused and simplify.
That’s exactly what we did. We disposed of
everything that wasn’t a core asset — we now
have a single new residential development, one
suburban property and a retail portfolio focused
exclusively on high-quality, high street assets.
Our Manhattan office portfolio is almost the same
size as it was in 2018, but with fewer properties,
meaning that One Vanderbilt and One Madison
represent a very big part of this portfolio, along with
other truly premium properties like 11 Madison and
280 Park, so we’re imposing our resources, time
and money on fewer, bigger core buildings. Our
portfolio today is the best portfolio SL Green has
ever had going into a new year.
We haven’t just improved the portfolio, we’ve
shrunk the share base through stock buyback,
so we own more of these better properties than
ever before. And so long as our stock remains
the best value in the market, we intend to continue
with our buyback program, with the goal of
completing more than $250 million in additional
repurchases in 2022.
CLOSING
The last two years have been volatile and
challenging as together we confronted the many
impacts of the pandemic. As New York City
proves its resilience and comes roaring back to
normal this year, we are proud that SL Green
has been a true corporate, civic and community
leader throughout. Our dedication to our
shareholders, tenants, employees and our City
is absolute, and the result is a Company that not
only weathered the storm but is stronger than ever.
This year we have already made enormous
progress on our goals, with the signing of
the IBM anchor lease at One Madison, over
550,000 square feet of additional leases signed
across our portfolio, the acquisition of another
ideally located Midtown asset at 450 Park
Avenue, new asset management and investor
relationships established, the expansion of
our Board and 7 Dey already surpassing the
90 percent leased threshold for market rate units.
On behalf of the entire leadership team at SL Green,
thank you for being our partners in 2021 as we again
demonstrated our commitment of the Company to
our shareholders and New York City. With New York
City returning to its world-leading form, 2022
promises to be another very big year for SL Green.
Marc Holliday
Chairman & Chief Executive Officer
5
“ We are back to being
this exciting place
we call New York.”
— Eric Adams, Mayor of New York City
6
SL GREEN ANNUAL REPORT 2021
7
New York City Trends
TOURISM >
BROADWAY >
56.4
MILLION
tourists expected in 2022.
ECONOMY >
NEW YORK CITY WILL
REBUILD
RENEW &
REINVENT
“ New York City’s recovery cannot and will not be about go-
ing back to the way things were — we are going to rebuild,
renew, and reinvent our city and our economy for today,
tomorrow, and generations to come.” — Mayor Adams.
TRAVEL >
During the 2021 holiday season,
New York City is alive, buzzing and illuminated
with 4 million theatergoers since last fall.
“Thirty-five theaters full with an occupancy of over
80%80%
of the seats. We’re back.” — Charlotte St. Martin,
President of the Broadway League.
NEW YORK CITY WAS THE NO. 1
DESTINATION FOR U.S. TOURISTS
8
SL GREEN ANNUAL REPORT 2021 SPORTS & ENTERTAINMENT >
The World’s Most Famous Arena is hosting
countless headliners in 2022 — from Elton John
to Andrea Bocelli and Billie Eilish, to name
a few! Live music is back to packed audiences!
Additionally, MSG welcomes back sporting
events including full schedules for hometown
teams the NY Rangers and NY Knicks.
RESTAURANTS >
To celebrate New York’s bustling dining industry, the 30th
Anniversary of NYC Restaurant Week will start in July 2022.
HOLIDAY PARADES >
Spectators returned to the streets of Manhattan for
the 95th annual Macy’s Thanksgiving Day Parade.
9
> New York City Trends
HOUSING >
EVENTS >
Full speed ahead! The New York City
Marathon returned for its 50th anniversary:
122 %
192 %
2021 saw young people flock back
to the city. Neighborhoods like Murray
Hill saw a 122% increase in demand
for move-in related tasks, while the
East Village saw a soaring 192%
increase, according to TaskRabbit.
HOTELS >
2021–2022 YTD:
29
54
NEW HOTELS
OPENED
NEW HOTELS IN
ACTIVE PIPELINE
RUNNERS IN 202130k
With the opening of new hotels like
Aman on Fifth Avenue and the Ritz
Carlton in NoMad, it is expected that
9,000 new
hotel rooms
will be coming online in 2022.
10
SL GREEN ANNUAL REPORT 2021 TRANSPORTATION >
$1.2T bipartisan infrastructure plan
boosts several New York City projects:
$465m
NYC Airports
$13.5b
Roads & Highways/
Bridge Repairs
$9.8b
For Clean Buses
& Mass Transit
$58b
Rail Improvements, Including
Northeast Corridor
11
EMPLOYMENT >
New York City has regained 79% of office-using
jobs lost during the pandemic.
TECH >
Tech continues to increase on space requirements post-Covid —
Farley lease
3.3M Total SF
122 Fifth lease
400K Total SF
Lord & Taylor
purchase
1.8M Total SF
11 Penn Plaza lease
400K Total SF
St. John’s Terminal purchase
4.9M Total SF
New York is now home to 103 unicorns* with cumulative valuation of $234.5 billion
*Unicorn is a term used in the venture capital industry to describe a privately held start-up company with
a value of over $1 billion.
SL Green — Doing Our Part
FOOD1ST BOWERY
MISSION THANKSGIVING >
NYCHA — STRAUS HOUSES >
FOOD 1ST — DONATION INITIATIVE >
“ At a time when New York City’s food
system is challenged, we feel an
obligation to act. Our contributions will
provide access to fresh meals for our
city’s first responders. Together with
SL Green, we can help our community
endure the difficulties we’ve all been
faced with,” said Daniel Boulud.
705,000+
MEALS DONATED
400+
RESTAURANT JOBS
SUPPORTED
35+
KITCHENS
ACTIVATED
SOUTH BRONX THANKSGIVING
FOOD DISTRIBUTION >
200+
LOCATIONS SERVED
$6m
RAISED
FOOD1ST GALA >
12
SL GREEN ANNUAL REPORT 2021 PAID VOLUNTEER DAY >
FDNY FOUNDATION >
We empower our employees to volunteer their time at
organizations that align with their personal values.
In September, our Chairman & CEO and our CFO each
received Humanitarian Awards at the FDNY Foundation’s
annual gala.
CITY HARVEST >
Throughout the month of June 2021, 700 pounds of food were collected during
donation drives held in our lobbies. This food was donated to City Harvest to aid
in their community food programs.
13
> SL Green – Doing Our Part
LE PAVILLON BY CHEF DANIEL BOULUD >
COMING SOON TO ONE VANDERBILT >
In the heart of Midtown, a culinary oasis
awaits all New Yorkers. Daniel Boulud’s
Le Pavillon is New York’s hottest new
restaurant, the gathering spot for power
lunches, special dinners and drinks
overlooking Grand Central Terminal and
the Chrysler Building.
10,212
BOTTLES OF
WINE SOLD
650+
ANNIVERSARY
CELEBRATIONS
10,000
POUNDS OF BLACK
OLIVE TREES INSIDE
5,420
OYSTERS
SERVED
100+
TABLES PER
NIGHT WAITLIST
FORBES
TRAVEL GUIDE
1,000+
BIRTHDAY
CELEBRATIONS
A hidden sushi dining experience nestled in Grand Central Terminal.
14
SL GREEN ANNUAL REPORT 2021 THE SUMMIT >
“
THIS IS A
FLOATING
GLASS &
MIRROR
CASTLE OF
WONDER
Everything is curated perfectly.”
— Chris N., TripAdvisor
Inspiring awe more than 1,200 feet
above Madison Avenue, SUMMIT
One Vanderbilt is New York’s newest
and most transformational cultural
destination. Unlike any other experience
in the world, SUMMIT has drawn
sellout crowds day and night to a multi-
level experience featuring New York’s
most stunning views, unique thrills and
a multisensory art installation.
>550k
TOTAL VISITORS
57
COUNTRIES
WITH TICKET
PURCHASERS
105
WEDDING
PROPOSALS
~400
MILES TRAVELED
IN ASCENT *
* Equivalent to the
distance from Manhattan
to North Carolina.
15
Looking Ahead Evolving
Office Spaces
EVOLVING DESIGN OF AMENITIES >
5–10 YEARS AGO
Supplementing Business
2–5 YEARS AGO
Optimizing Business
<2 YEARS–CURRENT
Driving Business
WORKPLACE
AMENITIES
WORKPLACE
AMENITIES
WORKPLACE
+
AMENITIES
(Source: Gensler)
EVOLVING DESIGN OF OFFICE SPACE >
Neighborhood Hub
Collaboration Nooks
Breakout Spaces
Outdoor Meeting
Space
Wellness Studio
Indoor/Outdoor
Footpath
(Source: Gensler)
SLG BUILDING AMENITIES >
– Curated amenity spaces based on building size, location and tenant profile
– Strategic lease-up of retail space to support office tenants
– Dedicated hospitality team recruited from the hotel and restaurant industries
Food & Beverage
Meeting Spaces
Social Spaces
Health & Wellness
16
SL GREEN ANNUAL REPORT 2021 ONE MADISON >
One Madison brings life to your work
Attracting and retaining top talent means providing them with a quality of life they can’t find anywhere else. In addition to
the vibrant neighborhood, One Madison delivers a full complement of amenities that set this building apart from the rest.
17
ONE VANDERBILT >
Le Pavillon by Daniel Boulud brings world-class dining to tenants and the city
Thinking about the building from the inside out from a tenant’s perspective, One Vanderbilt delivers a Class A experience.
“ To have created a restaurant
in this space is amazing; it is
iconic. It is the chapel in the
cathedral of One Vanderbilt.”
— Daniel Boulud
18
SL GREEN ANNUAL REPORT 2021
The Vandy Club provides complete access for tenants
One Vanderbilt features a 30,000 SF amenity floor offering tenants exclusive access to an expansive outdoor terrace space,
hotel-style social space, a state-of-the-art auditorium and 30-seat boardroom. Let’s not forget Daniel Boulud’s La Terrace café.
19
100 PARK AVE >
20
Park House is a highly amenitized
facility focused on productivity,
health, and relaxation
Spacious gathering areas, spa-inspired workout /
wellness rooms, a cafe, and game room including a
golf simulator, are available to tenants only.
SL GREEN ANNUAL REPORT 2021 420 LEXINGTON >
Graybar 19 offers tenants a brand new luxury conference center
Offering views of the East River and Chrysler Building from its fully landscaped outdoor terrace and more than
18,000 square feet of meeting spaces, collaborative lounge areas, and a self-service pantry.
21
SL Green — Creating a Better Environment
ONE VANDERBILT >
One Vanderbilt is the only building
in the world to simultaneously
achieve LEED v3 Platinum and
v4 Gold certification.
PRIVATELY OWNED PUBLIC SPACES (POPS) >
SL Green’s portfolio is home to 10 POPS
covering 150,000 square feet that add publicly
accessible amenities to our community.
# BUILDING
1
2
3
4
5
6
7
8
9
10 East 53rd Street
1350 Avenue of the Americas
1185 Avenue of the Americas
1515 Broadway
245 Park Avenue
280 Park Avenue
555 West 57th Street
810 Seventh Avenue
885 Third Avenue
10 919 Third Avenue
22
SF
6,606
5,644
17,429
12,200
29,540
17,603
22,952
6,575
8,200
18,783
SL GREEN ANNUAL REPORT 2021 SL GREEN ART COMMISSIONS >
1
6
2
7
3
8
4
9
5
1 0
1. 280 Park Avenue, Kaws, BFF, 2019
6. One Vanderbilt, Philip Taaffe, Nocturne with
2. 280 Park Avenue, Tom Friedman, Huddle, 2016
3. One Vanderbilt, Yayoi Kusama, Clouds, 2019
4. One Vanderbilt, Tony Cragg, Untitled, 2020
5. One Vanderbilt, teamLab, Continuous Life
and Death at the Now of Eternity II, 2017
Architectural Fragments, 2014
7. 810 Seventh Avenue, Robert Indiana, Hope, 2008
8. 461 Fifth Avenue, Shirazeh Houshiary, Between, 2011
9. 711 Third Avenue, Hans Hofmann, Mosaic Mural, 1956
10. 125 Park Avenue, Diana Moore, Lexington Head, 1997
WASTE MANAGEMENT >
SL Green’s corporate office composting program diverts
5,000
POUNDS OF ORGANIC WASTE FROM LANDFILLS.
WALKABILITY >
90% of SL Green’s portfolio is within walking distance (no more than ½ mile) from a NYC Park.
SL GREEN HAS AN AVERAGE WALK SCORE® OF 99/100.
23
Our Employees — The Heart of the Company
AVERAGE TENURE FOR SENIOR MANAGERS >
EMPLOYEE ENGAGEMENT SURVEYS >
21 YEARS
24
According to our 2021 employee survey:
97% OF EMPLOYEES ARE
PROUD TO WORK FOR SLG
SL GREEN ANNUAL REPORT 2021 SL Green recognized as a Best Place to Work
The ingenuity, leadership and determination of our people is inspirational! Their collaboration and
creativity has helped us overcome challenges, implement best-in-class protocols and move our
entire portfolio to a more sustainable future. Their relentless efforts have created a workplace unlike
any other and driven us to — literal — new heights.
25
38
39
26 6
27
3
25
14TH STREET
10
40
23RD STREET
5
33
4
9
23
12
28
2
34TH STREET
7
8
16
36
11
13
42ND STREET
15
37
50TH STREET
18
S
E
C
O
N
D A
V
E
N
U
E
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
FIR
S
T A
V
E
N
U
E
57 TH STREET
59TH STREET
65 TH STREET
26
30
M
A
D
I
S
O
N
A
V
E
N
U
E
F
I
F
T
H
A
V
E
N
U
E
*
35
P
A
R
K
A
V
E
N
U
E
29
34
41
24
SL GREEN ANNUAL REPORT 2021
14TH STREET
21
34TH STREET
22
42
42ND STREET
17
S
E
V
E
N
T
H
A
V
E
N
U
E
50TH STREET
E
I
G
H
T
H
A
V
E
N
U
E
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
14
19
32
31
1
20
S
I
X
T
H
A
V
E
N
U
E
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
27
Ownership
Interest (%)
Submarket
Ownership
Square Feet (1)
Occupancy
(%)
SL Green Portfolio
Map Properties
Key (As of December 31, 2021)
OFFICE PROPERTIES
2 Herald Square
10 East 53rd Street
100 Church Street
100 Park Avenue
11 Madison Avenue
110 Greene Street
125 Park Avenue
220 East 42nd Street
280 Park Avenue
304 Park Avenue South
420 Lexington Avenue (Graybar)
461 Fifth Avenue
485 Lexington Avenue
555 West 57th Street
711 Third Avenue
800 Third Avenue
810 Seventh Avenue
919 Third Avenue
1185 Avenue of the Americas
1350 Avenue of the Americas
1515 Broadway
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22 Worldwide Plaza
SUBTOTAL
RETAIL PROPERTIES
23
11 West 34th Street
24 21 East 66th Street
25 85 Fifth Avenue
115 Spring Street
26
27
121 Greene Street
28 650 Fifth Avenue
29 690 Madison Avenue
30 717 Fifth Avenue
31
32
719 Seventh Avenue
1552–1560 Broadway
SUBTOTAL
DEVELOPMENT / REDEVELOPMENT
33 One Vanderbilt Avenue
19 East 65th Street
34
609 Fifth Avenue(3)
†
35 625 Madison Avenue
707 Eleventh Avenue(3)
†
36
750 Third Avenue
37 885 Third Avenue
SUBTOTAL
CONSTRUCTION IN PROGRESS
15 Beekman
38 7 Dey Street / 185 Broadway
39
40 One Madison Avenue
760 Madison Avenue
41
SUBTOTAL
51.0
55.0
100.0
50.0
60.0
100.0
100.0
51.0
50.0
100.0
100.0
100.0
100.0
100.0
100.0(2)
60.5
100.0
51.0
100.0
100.0
56.9
25.0
30.0
32.3
36.3
51.0
50.0
50.0
100.0
10.9
75.0
50.0
71.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
20.0
25.5
100.0
Herald Square
Plaza District
Downtown
Grand Central South
Park Avenue South
Soho
Grand Central
Grand Central
Park Avenue
Midtown South
Grand Central North
Midtown
Grand Central North
Midtown West
Grand Central North
Grand Central North
Times Square
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
Leasehold Interest
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest(2)
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
Fee Interest
Herald Square / Penn Station Fee Interest
Fee Interest
Plaza District
Fee Interest
Midtown South
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
Times Square
Grand Central
Plaza District
Rockefeller Center
Plaza District
Midtown West
North
Midtown / Plaza District
Fee Interest
Fee Interest
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
Fee / Leasehold Interest
Lower Manhattan
Lower Manhattan
Park Avenue South
Plaza District
Fee Interest
Leasehold Interest
Fee Interest
Fee Interest
42
FEE OWNERSHIP — Subject to long-term, third-party net operating leases.
1591–1597 Broadway
Times Square
SUBTOTAL
100.0
Fee Interest
†
†
†
RESIDENTIAL PROPERTIES
1080 Amsterdam(3)
Stonehenge Portfolio(3)
SUBTOTAL
NEW YORK CITY GRAND TOTAL
SUBURBAN PORTFOLIO
Landmark Square
SUBURBAN GRAND TOTAL
TOTAL PORTFOLIO
92.5
Various
Upper West Side
Leasehold Interest
Fee Interest
100.0
Stamford, Connecticut
Fee Interest
(1) Square Feet — Represents the rentable square footage at the time the property
was acquired.
(2) The Company owns 50% of the fee interest.
(3) Asset sold or under contract for sale and has been removed from the
corresponding portfolio map.
†Properties not shown on map.
* In April 2022, the Company entered into contract to acquire the property.
369,000
354,300
1,047,500
834,000
2,314,000
223,600
604,245
1,135,000
1,219,158
215,000
1,188,000
200,000
921,000
941,000
524,000
526,000
692,000
1,454,000
1,062,000
562,000
1,750,000
2,048,725
20,184,528
17,150
13,069
12,946
5,218
7,131
69,214
7,848
119,550
10,040
57,718
319,884
1,657,198
14,639
138,563
563,000
159,720
780,000
625,300
3,938,420
198,488
221,884
1,396,426
58,574
1,875,372
7,684
7,684
82,250
445,934
528,184
26,854,072
862,800
862,800
27,716,872
95.8
89.0
90.1
76.3
100.0
77.1
99.2
91.1
94.9
100.0
84.8
84.2
80.7
99.7
94.7
87.6
82.6
100.0
79.8
81.2
99.9
95.1
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.4
—
88.3
86.6
5.5
—
25.2
23.3
34.0
23.6
N /A
N /A
N /A
N /A
100.0
99.0
96.7
78.9
78.9
31
Acquisition and Disposition Activity
Overall Manhattan sales volume increased by 46.3% in 2021 to $19.5 billion as compared to $13.2 billion in 2020. In
2021, 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 55 West 46th Street
- Tower 46, 605 West 42nd Street - Sky, 635-641 Sixth Avenue, 220 East 42nd Street, 400 East 57th Street, 590 Fifth Avenue,
One Madison Avenue, and 110 East 42nd Street for total gross valuations of $2.9 billion.
Debt and Preferred Equity
In 2020 and 2021, 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 2020 and 2021 were to reputable owners or acquirers which have sizable equity subordinate to our last dollar
of exposure. During 2021, 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
$207.0 million, and sales, redemption and participations of $201.4 million.
For descriptions of significant activities in 2021, refer to "Part I, Item 1. Business - Highlights from 2021."
Closed on the sale of 400 East 57th Street for a gross sales price of $133.5 million.
Highlights from 2021
Our significant achievements from 2021 included:
Corporate
•
•
Leasing
Repurchased 4.5 million shares of our common stock and redeemed $0.6 million units of our Operating Partnership
under our $3.5 billion share repurchase program at an average price of $75.73 per share. From program inception
through December 31, 2021, we have repurchased a total of 34.1 million shares of our common stock and redeemed
$1.7 million units of our Operating Partnership under the program at an average price of $88.96 per share.
Declared a special dividend of $2.4392 per share, comprised entirely of common stock and authorized a reverse
stock split to mitigate the dilutive impact of the special dividend with a ratio of 1.03060-for-1. These transactions
were completed in January 2022. 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.
•
•
•
•
•
•
Signed 159 Manhattan office leases covering approximately 1.9 million square feet. The mark-to-market on signed
Manhattan office leases was 2.5% lower in 2021 than the previously fully escalated rents on the same spaces.
Exceeded 95% leased at One Vanderbilt Avenue as of December 2021 after signing new leases with Flexpoint Ford;
Tennor Holding B.V.; UiPath; MSD Partners; Mamoura Holdings (US), LLC; Kyndrel; and Nearwater Management
LLC; as well as lease expansions with TD Securities; Carlyle Investment Management, Inc.; InTandem Capital
Partners LLC and Sagewind Capital LLC; and Stone Point Capital LLC.
Signed a lease expansion with Bloomberg LP for 191,207 square feet at 919 Third Avenue.
Signed a new lease with Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, PC for 101,394 square feet at 919 Third
Avenue.
Signed a new lease with Chelsea Piers Fitness for 55,780 square feet at One Madison Avenue.
Signed a lease renewal with Wells Fargo Bank N.A. for 103,803 square feet at 100 Park Avenue.
Acquisitions
•
Closed on the acquisition of the fee under 1591-1597 Broadway for a gross purchase price of $121.0 million. A third
party has asserted ownership rights to the fee, which the Company is contesting.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Dispositions
million.
Took possession of 690 Madison Avenue at a gross asset valuation of $72.2 million. This property previously served
as collateral for a debt and preferred equity investment and was acquired through a successful bid for the fee interest
at the foreclosure of the asset.
Closed on the acquisition of the fee interest at 461 Fifth Avenue for a gross purchase price of $28.0 million pursuant
to a purchase option under a previous ground lease at the property which was terminated as part of the acquisition.
Closed on the sale of the office and garage condominiums at 110 East 42nd Street for a gross sales price of $117.1
Entered into an agreement to sell 707 Eleventh Avenue for a gross sales price of $95.0 million. The transaction is
expected to close in the first quarter of 2022.
Together with our partner, entered into an agreement to sell 1080 Amsterdam Avenue for a gross sales price of
$42.5 million. Simultaneously, the Company agreed to sell its remaining interests in the Stonehenge portfolio for
gross consideration of approximately $1.0 million. The transactions are expected to close in the first quarter of 2022.
Closed on the sale of a 25% interest in One Madison Avenue for a committed aggregate equity to the project totaling
no less than $259.3 million.
Closed on the sale of 590 Fifth Avenue for a gross sales price of $103.0 million.
Closed on the sale of a 49% interest in 220 East 42nd Street for a gross valuation of $790.1 million.
Closed on the sale of 635-641 Sixth Avenue for a gross sales price of $325.0 million.
Closed on the sale of our interest in 605 West 42nd Street, also known as "Sky," for a gross valuation of $858.1
Closed on the sale of the commercial condominium units located at 55 West 46th Street, also known as "Tower 46,"
for a gross sales price of $275.0 million.
million.
Finance
Together with our joint venture partners, closed on the $3.0 billion 10-year fixed-rate refinancing of One Vanderbilt
Avenue. The new financing carries a stated coupon of 2.855%, equivalent to a rate of 2.947% inclusive of hedging
costs, and replaces the previous $1.75 billion construction facility that had an outstanding balance of approximately
$1.54 billion at the time of repayment.
Refinanced, extended and reduced the Company's unsecured corporate credit facility to $2.5 billion. The new
facility, which reduced overall borrowing costs, includes a $1.25 billion revolving line of credit and $1.05 billion 5-
year funded term loan that both mature in May 2027 as well as a $200 million 7-year funded term loan that was not
modified and matures in November 2024.
Debt and Preferred Equity Investments
•
Originated and retained, or acquired, $0.2 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 $0.2 billion of proceeds from sales, repayments and participations.
70310_10K_r2.indd 2
70310_10K_r2.indd 2
3/2/22 8:04 AM
3/2/22 8:04 AM
2
3
Acquisition and Disposition Activity
Overall Manhattan sales volume increased by 46.3% in 2021 to $19.5 billion as compared to $13.2 billion in 2020. In
2021, 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 55 West 46th Street
- Tower 46, 605 West 42nd Street - Sky, 635-641 Sixth Avenue, 220 East 42nd Street, 400 East 57th Street, 590 Fifth Avenue,
One Madison Avenue, and 110 East 42nd Street for total gross valuations of $2.9 billion.
Debt and Preferred Equity
In 2020 and 2021, 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 2020 and 2021 were to reputable owners or acquirers which have sizable equity subordinate to our last dollar
of exposure. During 2021, 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
$207.0 million, and sales, redemption and participations of $201.4 million.
For descriptions of significant activities in 2021, refer to "Part I, Item 1. Business - Highlights from 2021."
Highlights from 2021
Our significant achievements from 2021 included:
Corporate
•
Repurchased 4.5 million shares of our common stock and redeemed $0.6 million units of our Operating Partnership
under our $3.5 billion share repurchase program at an average price of $75.73 per share. From program inception
through December 31, 2021, we have repurchased a total of 34.1 million shares of our common stock and redeemed
$1.7 million units of our Operating Partnership under the program at an average price of $88.96 per share.
•
Declared a special dividend of $2.4392 per share, comprised entirely of common stock and authorized a reverse
stock split to mitigate the dilutive impact of the special dividend with a ratio of 1.03060-for-1. These transactions
were completed in January 2022. 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.
Leasing
Signed 159 Manhattan office leases covering approximately 1.9 million square feet. The mark-to-market on signed
Manhattan office leases was 2.5% lower in 2021 than the previously fully escalated rents on the same spaces.
Exceeded 95% leased at One Vanderbilt Avenue as of December 2021 after signing new leases with Flexpoint Ford;
Tennor Holding B.V.; UiPath; MSD Partners; Mamoura Holdings (US), LLC; Kyndrel; and Nearwater Management
LLC; as well as lease expansions with TD Securities; Carlyle Investment Management, Inc.; InTandem Capital
Partners LLC and Sagewind Capital LLC; and Stone Point Capital LLC.
Signed a lease expansion with Bloomberg LP for 191,207 square feet at 919 Third Avenue.
Signed a new lease with Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, PC for 101,394 square feet at 919 Third
Signed a new lease with Chelsea Piers Fitness for 55,780 square feet at One Madison Avenue.
Signed a lease renewal with Wells Fargo Bank N.A. for 103,803 square feet at 100 Park Avenue.
•
•
•
•
•
•
•
Avenue.
Acquisitions
Closed on the acquisition of the fee under 1591-1597 Broadway for a gross purchase price of $121.0 million. A third
party has asserted ownership rights to the fee, which the Company is contesting.
•
•
Took possession of 690 Madison Avenue at a gross asset valuation of $72.2 million. This property previously served
as collateral for a debt and preferred equity investment and was acquired through a successful bid for the fee interest
at the foreclosure of the asset.
Closed on the acquisition of the fee interest at 461 Fifth Avenue for a gross purchase price of $28.0 million pursuant
to a purchase option under a previous ground lease at the property which was terminated as part of the acquisition.
Dispositions
•
•
•
•
•
•
•
•
•
•
Finance
•
•
Closed on the sale of the office and garage condominiums at 110 East 42nd Street for a gross sales price of $117.1
million.
Entered into an agreement to sell 707 Eleventh Avenue for a gross sales price of $95.0 million. The transaction is
expected to close in the first quarter of 2022.
Together with our partner, entered into an agreement to sell 1080 Amsterdam Avenue for a gross sales price of
$42.5 million. Simultaneously, the Company agreed to sell its remaining interests in the Stonehenge portfolio for
gross consideration of approximately $1.0 million. The transactions are expected to close in the first quarter of 2022.
Closed on the sale of a 25% interest in One Madison Avenue for a committed aggregate equity to the project totaling
no less than $259.3 million.
Closed on the sale of 590 Fifth Avenue for a gross sales price of $103.0 million.
Closed on the sale of 400 East 57th Street for a gross sales price of $133.5 million.
Closed on the sale of a 49% interest in 220 East 42nd Street for a gross valuation of $790.1 million.
Closed on the sale of 635-641 Sixth Avenue for a gross sales price of $325.0 million.
Closed on the sale of our interest in 605 West 42nd Street, also known as "Sky," for a gross valuation of $858.1
million.
Closed on the sale of the commercial condominium units located at 55 West 46th Street, also known as "Tower 46,"
for a gross sales price of $275.0 million.
Together with our joint venture partners, closed on the $3.0 billion 10-year fixed-rate refinancing of One Vanderbilt
Avenue. The new financing carries a stated coupon of 2.855%, equivalent to a rate of 2.947% inclusive of hedging
costs, and replaces the previous $1.75 billion construction facility that had an outstanding balance of approximately
$1.54 billion at the time of repayment.
Refinanced, extended and reduced the Company's unsecured corporate credit facility to $2.5 billion. The new
facility, which reduced overall borrowing costs, includes a $1.25 billion revolving line of credit and $1.05 billion 5-
year funded term loan that both mature in May 2027 as well as a $200 million 7-year funded term loan that was not
modified and matures in November 2024.
Debt and Preferred Equity Investments
•
Originated and retained, or acquired, $0.2 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 $0.2 billion of proceeds from sales, repayments and participations.
2
3
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As of December 31, 2021, we owned the following interests in properties in the New York metropolitan area, primarily in
conditions that may affect the property. The determined and allocated fair values to the real estate acquired will affect the
midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
amount of depreciation and amortization we record over the respective estimated useful lives or term of the lease.
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)
Fee Interest
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
12
2
8
1
23
7
30
1
31
8,180,345
17,888
2,538,284
7,684
10,744,201
862,800
11,607,001
10
12,004,183
301,996
3,275,508
—
15,581,687
—
9
3
—
22
—
22
22
11
11
1
45
7
20,184,528
319,884
5,813,792
7,684
26,325,888
862,800
15,581,687
52
27,188,688
82,250
6
445,934
7
528,184
11,689,251
28
16,027,621
59
27,716,872
92.1 %
91.2 %
N/A
N/A
92.0 %
78.9 %
91.5 %
97.0 %
91.6 %
(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. Properties under construction
are not included in the calculation of weighted average occupancy.
As of December 31, 2021, 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 $10.1 million 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 and Estimates
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
investments, 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 by allocating the purchase price, including transaction costs, at their respective fair values on the acquisition
date.
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.
The allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed involves
subjectivity as the allocations are based on an analysis of the respective fair values. In determining the fair value of the real
estate acquired, the Company will use a third-party valuation which primarily utilizes 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. We assess fair value of the acquired 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
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5
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 i) the lease transfers ownership of the asset at the end of the lease term, ii)
the lease grants an option to purchase the asset that we are reasonably certain to exercise, iii) the lease term is for a major part
of the remaining economic life of the asset, or iv) 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
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 assess for impairment indicators based on
factors such as, among other things, market conditions, occupancy rates, rental payment collections, and operating performance
of the asset. If indicators of impairment are present, we evaluate real estate investments 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.
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. Determining control of the entities can be subjective in assessing which activities of the
joint venture most significantly impact the economic performance and whether the rights of the joint venture partner are
protective or participating. In making this determination, any new or amended joint venture agreement is assessed by the
Company for the activities that most significantly impact the joint venture’s economic performance based on the business
purpose and design of the venture. We assess the rights that are conveyed to us in the agreement and evaluate whether we are
provided with participating or protective rights over the activities that most significantly impact the entity’s economic
performance. We also assess the rights of our joint venture partner. Such participating rights include, among other things, the
right to approve/amend the annual budget, leasing of the property to a significant tenant, and approval of tax returns and
auditors. If our joint venture partner has substantive participating rights and we are determined not to be the primary
beneficiary, we do not consolidate the entity.
As of December 31, 2021, 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:
conditions that may affect the property. The determined and allocated fair values to the real estate acquired will affect the
amount of depreciation and amortization we record over the respective estimated useful lives or term of the lease.
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)
Fee Interest
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
12
2
8
1
23
7
30
1
31
8,180,345
17,888
2,538,284
7,684
10,744,201
862,800
11,607,001
10
12,004,183
301,996
3,275,508
—
—
9
3
—
22
—
22
15,581,687
45
26,325,888
15,581,687
52
27,188,688
20,184,528
319,884
5,813,792
7,684
862,800
22
11
11
1
7
7
82,250
6
445,934
528,184
11,689,251
28
16,027,621
59
27,716,872
92.1 %
91.2 %
N/A
N/A
92.0 %
78.9 %
91.5 %
97.0 %
91.6 %
(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. Properties under construction
are not included in the calculation of weighted average occupancy.
As of December 31, 2021, 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 $10.1 million 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 and Estimates
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
investments, 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 by allocating the purchase price, including transaction costs, at their respective fair values on the acquisition
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
date.
leases.
The allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed involves
subjectivity as the allocations are based on an analysis of the respective fair values. In determining the fair value of the real
estate acquired, the Company will use a third-party valuation which primarily utilizes 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. We assess fair value of the acquired 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
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 i) the lease transfers ownership of the asset at the end of the lease term, ii)
the lease grants an option to purchase the asset that we are reasonably certain to exercise, iii) the lease term is for a major part
of the remaining economic life of the asset, or iv) 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
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 assess for impairment indicators based on
factors such as, among other things, market conditions, occupancy rates, rental payment collections, and operating performance
of the asset. If indicators of impairment are present, we evaluate real estate investments 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.
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. Determining control of the entities can be subjective in assessing which activities of the
joint venture most significantly impact the economic performance and whether the rights of the joint venture partner are
protective or participating. In making this determination, any new or amended joint venture agreement is assessed by the
Company for the activities that most significantly impact the joint venture’s economic performance based on the business
purpose and design of the venture. We assess the rights that are conveyed to us in the agreement and evaluate whether we are
provided with participating or protective rights over the activities that most significantly impact the entity’s economic
performance. We also assess the rights of our joint venture partner. Such participating rights include, among other things, the
right to approve/amend the annual budget, leasing of the property to a significant tenant, and approval of tax returns and
auditors. If our joint venture partner has substantive participating rights and we are determined not to be the primary
beneficiary, we do not consolidate the entity.
4
5
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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 as of December 31, 2021.
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 and we have
determined that the collectability of substantially all of the lease payments are probable. If collectability of substantially all of
the lease payments is assessed as not probably, rental revenue is recognized only upon actual receipt. The Company assesses the
probability of collecting substantially all payments under its leases based on multiple factors, including, among other things,
payment history of the lessee, the credit rating of the lessee, historical operations and trends within the lessee’s industry, current
and future economic conditions. 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.
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 the owner of
tenant improvements for accounting purposes or the tenant is. 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.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred
Debt and preferred equity investments are placed on a non-accrual status when, in the opinion of management, a full recovery
rents receivable on the consolidated balance sheets.
In addition to base rent, our tenants also generally will pay 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
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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 have a controlling financial interest in the entity
owning 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 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.
The Company assesses the probability of a borrower’s ability to repay the debt and preferred equity investment similar to
the factors noted above. 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.
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.
of interest income becomes doubtful. Interest income recognition is resumed on any debt or preferred equity investment when
the performance of such non-accrual debt or preferred equity investment 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
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 as of December 31, 2021.
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
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 and we have
determined that the collectability of substantially all of the lease payments are probable. If collectability of substantially all of
the lease payments is assessed as not probably, rental revenue is recognized only upon actual receipt. The Company assesses the
probability of collecting substantially all payments under its leases based on multiple factors, including, among other things,
payment history of the lessee, the credit rating of the lessee, historical operations and trends within the lessee’s industry, current
and future economic conditions. 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.
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 the owner of
tenant improvements for accounting purposes or the tenant is. 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.
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 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.
Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not
We record a gain or loss on sale of real estate assets when we no longer have a controlling financial interest in the entity
classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if
owning 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 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.
The Company assesses the probability of a borrower’s ability to repay the debt and preferred equity investment similar to
the factors noted above. 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.
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 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 when
the performance of such non-accrual debt or preferred equity investment 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
6
7
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on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Results of Operations
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.
Comparison of the year ended December 31, 2021 to the year ended December 31, 2020
The following comparison for the year ended December 31, 2021, or 2021, to the year ended December 31, 2020, or
2020, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2020 and still owned by
us in the same manner as of December 31, 2021 (Same-Store Properties totaled 21 of our 31 consolidated operating
properties),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2021 and 2020 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 2021 and 2020, 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
2021
2020
Change
Change
2021
2020
2021
2020
2021
2020
Change
$ 533.2 $ 564.5 $ (31.3)
(5.5) % $ 24.6 $ 70.1 $ 120.4 $ 169.8 $ 678.2 $ 804.4 $ (126.2)
$
%
—
—
— % —
—
80.3
120.2
80.3
120.2
13.0
(9.1)
(70.0) %
2.4
3.9
79.2
111.3
85.5
128.2
537.1
577.5
(40.4)
(7.0) % 27.0
74.0
279.9
401.3
844.0
1,052.8
(208.8)
Property operating expenses
263.1
271.3
(8.2)
(3.0) % 10.1
31.0
73.3
86.2
346.5
388.5
(42.0)
(10.8) %
—
0.3
— % —
—
3.5
0.5
3.8
0.5
—
—
— % —
—
94.9
91.8
94.9
91.8
263.4
271.3
(7.9)
(2.9) % 10.1
31.0
171.7
178.5
445.2
480.8
(35.6)
$
%
Change
(39.9)
(42.7)
3.3
3.1
(15.7) %
(33.2) %
(33.3) %
(19.8) %
660.0 %
3.4 %
(7.4) %
—
3.9
0.3
—
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 from
unconsolidated joint ventures
Equity in net (loss) gain on
sale of interest in
unconsolidated joint venture/
real estate
Purchase price and other fair
value adjustment
Gain on sale of real estate,
net
Depreciable real estate
reserves and impairments
Loss on early extinguishment
of debt
Loan loss and other
investment reserves, net of
recoveries
Net income
Rental Revenue
$ (82.3) $ (128.5) $ 46.2
(36.0) %
(216.9)
(313.7)
96.8
(30.9) %
(55.4)
(25.2)
(30.2)
119.8 %
(32.8)
3.0
(35.8)
(1,193.3) %
210.1
187.5
22.6
12.1 %
287.4
215.5
71.9
33.4 %
(23.8)
(60.5)
36.7
(60.7) %
(1.6)
—
(1.6)
— %
(2.9)
(35.3)
32.4
$ 480.6 $ 414.8 $ 65.8
(91.8) %
15.9 %
Rental revenues decreased primarily due to our Disposed Properties ($45.5 million), properties moved into
redevelopment ($39.7 million), and a lower contribution from our Same-Store Properties ($31.3 million) driven by increased
vacancy at 1185 Avenue of the Americas ($18.3 million), 420 Lexington Avenue ($6.0 million) and 485 Lexington Avenue
($5.5 million). Rental revenues decreased further as a result of the 49.0% joint venture interest sale in 220 East 42nd Street
($30.4 million) during the third quarter of 2021. This was partially offset by the addition of 885 Third Avenue to the
consolidated portfolio in the first quarter of 2021 ($26.7 million).
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8
9
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
Results of Operations
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.
Comparison of the year ended December 31, 2021 to the year ended December 31, 2020
The following comparison for the year ended December 31, 2021, or 2021, to the year ended December 31, 2020, or
2020, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2020 and still owned by
us in the same manner as of December 31, 2021 (Same-Store Properties totaled 21 of our 31 consolidated operating
properties),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2021 and 2020 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 2021 and 2020, 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
2021
2020
$
Change
%
Change
2021
2020
2021
2020
2021
2020
$
Change
%
Change
$ 533.2 $ 564.5 $ (31.3)
(5.5) % $ 24.6 $ 70.1 $ 120.4 $ 169.8 $ 678.2 $ 804.4 $ (126.2)
—
3.9
—
—
— % —
—
80.3
120.2
80.3
120.2
13.0
(9.1)
(70.0) %
2.4
3.9
79.2
111.3
85.5
128.2
(39.9)
(42.7)
537.1
577.5
(40.4)
(7.0) % 27.0
74.0
279.9
401.3
844.0
1,052.8
(208.8)
(15.7) %
(33.2) %
(33.3) %
(19.8) %
Property operating expenses
263.1
271.3
(8.2)
(3.0) % 10.1
31.0
73.3
86.2
346.5
388.5
(42.0)
(10.8) %
Transaction related costs
Marketing, general and
administrative
0.3
—
—
0.3
— % —
—
3.5
0.5
3.8
0.5
—
—
— % —
—
94.9
91.8
94.9
91.8
3.3
3.1
263.4
271.3
(7.9)
(2.9) % 10.1
31.0
171.7
178.5
445.2
480.8
(35.6)
660.0 %
3.4 %
(7.4) %
Other income (expenses):
Interest expense and
amortization of deferred
financing costs, net of
interest income
Depreciation and
amortization
Equity in net loss from
unconsolidated joint ventures
Equity in net (loss) gain on
sale of interest in
unconsolidated joint venture/
real estate
Purchase price and other fair
value adjustment
Gain on sale of real estate,
net
Depreciable real estate
reserves and impairments
Loss on early extinguishment
of debt
Loan loss and other
investment reserves, net of
recoveries
Net income
Rental Revenue
$ (82.3) $ (128.5) $ 46.2
(36.0) %
(216.9)
(313.7)
96.8
(30.9) %
(55.4)
(25.2)
(30.2)
119.8 %
(32.8)
3.0
(35.8)
(1,193.3) %
210.1
187.5
22.6
12.1 %
287.4
215.5
71.9
33.4 %
(23.8)
(60.5)
36.7
(60.7) %
(1.6)
—
(1.6)
— %
(2.9)
(35.3)
32.4
$ 480.6 $ 414.8 $ 65.8
(91.8) %
15.9 %
Rental revenues decreased primarily due to our Disposed Properties ($45.5 million), properties moved into
redevelopment ($39.7 million), and a lower contribution from our Same-Store Properties ($31.3 million) driven by increased
vacancy at 1185 Avenue of the Americas ($18.3 million), 420 Lexington Avenue ($6.0 million) and 485 Lexington Avenue
($5.5 million). Rental revenues decreased further as a result of the 49.0% joint venture interest sale in 220 East 42nd Street
($30.4 million) during the third quarter of 2021. This was partially offset by the addition of 885 Third Avenue to the
consolidated portfolio in the first quarter of 2021 ($26.7 million).
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9
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The following table presents a summary of the commenced leasing activity for the year ended December 31, 2021 in our
Property Operating Expenses
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
Sold 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
1,717,735
(90,435)
(353,897)
1,028,198
65,834
4,487
1,098,519
2,371,922
671,210
741,490 $
68.37 $
66.26 $
57,740
4,981
59,272 $
56.01 $
81.70 $
5,397 $
25.44 $
31.55 $
60.21
11.12
—
Total leased space commenced
733,931
806,159 $
67.17 $
67.83 $
56.20
Total available space at end of year
1,637,991
Early renewals
• Office
• Retail
• Storage
368,637
390,290 $
68.89 $
71.90 $
9.55
50,409
2,248
77,042 $
96.21 $
86.21 $
2,262 $
28.09 $
28.09 $
—
—
Total early renewals
421,294
469,594 $
73.18 $
74.03 $
7.94
Total commenced leases, including replaced
previous vacancy
• Office
• Retail
• Storage
1,131,780 $
68.55 $
69.18 $
42.74
136,314 $
78.73 $
84.48 $
7,659 $
26.22 $
30.02 $
4.83
—
Total commenced leases
1,275,753 $
69.38 $
71.12 $
38.43
6.4
1.6
1.5
6.0
2.2
0.6
0.5
1.9
5.0
1.1
1.2
4.5
8.5
10.7
4.9
8.7
2.8
4.4
1.4
3.1
6.6
7.2
3.9
6.6
(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 $62.27 per rentable square feet for 363,354 rentable square feet. Average
starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $65.70 per rentable square feet for
753,644 rentable square feet.
Investment Income
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, 2021 and 2020, the weighted
average balance of our debt and preferred equity investment portfolio and the weighted average yield were $1.1 billion and
7.1%, respectively, compared to $1.4 billion and 7.7%, respectively. As of December 31, 2021, the debt and preferred equity
investment portfolio had a weighted average term to maturity of 1.8 years excluding extension options.
Other Income
Other income decreased mainly due to lower lease termination income for the year ended December 31, 2021
($22.6 million) as compared to the same period in 2020 ($48.2 million), income, net of legal costs, derived from a legal
settlement during the year ended December 31, 2020 ($20.2 million), and development fee income earned during the year
ended December 31, 2020 ($7.3 million), partially offset by an increase in leasing and management fee income for the year
ended December 31, 2021 ($11.4 million).
Property operating expenses decreased primarily due to reduced variable expenses and real estate taxes at our Disposed
Properties ($9.9 million and $9.6 million, respectively). Further decreases resulted from reduced real estate taxes at our Same-
Store Properties, 220 East 42nd Street (which the Company sold a 49.0% joint venture interest) and our Acquisition Properties
($7.5 million, $4.2 million and $2.6 million, respectively), and decreased variable expenses at 750 Third Avenue and 220 East
42nd Street ($5.9 million and $5.5 million, respectively).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses increased to $94.9 million for the year ended December 31, 2021,
compared to $91.8 million for the same period in 2020 due primarily to an increase in rent expense and inflationary pressure on
compensation costs.
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 due to interest
capitalization in connection with properties that are under development ($9.5 million), lower interest expense from the
revolving credit facility ($8.3 million), senior unsecured notes ($8.2 million) and term loans ($6.6 million) resulting from a
decrease in the average LIBOR rate for the year ended December 31, 2021 as compared to the year ended December 31, 2020,
and the disposal of 315 West 33rd Street - "The Olivia" in 2020 ($3.4 million). The weighted average consolidated debt balance
outstanding was $4.8 billion for the year ended December 31, 2021, compared to $5.8 billion for the year ended December 31,
2020. The consolidated weighted average interest rate was 2.93% for the year ended December 31, 2021, as compared to 3.06%
for the year ended December 31, 2020.
Depreciation and Amortization
Depreciation and amortization decreased primarily due to accelerated depreciation at One Madison Avenue in the third
quarter of 2020 related to the property's redevelopment ($70.3 million), and decreased depreciation and amortization at our
Disposed properties ($20.7 million) and Same-Store Properties ($12.7 million).
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures increased primarily as a result of higher depreciation expense at One
Vanderbilt Avenue ($43.0 million), which was put in service during the fourth quarter of 2020, partially offset by an increase in
income from operations at 2 Herald Square ($7.5 million).
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2021, we recognized losses on the sales of our interest in One Madison Avenue
($26.9 million), 55 West 46th Street ($15.3 million) and 400 East 57th Street ($1.5 million), offset by a gain on the sale of our
interest in 605 West 42nd Street ($8.3 million). 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).
Purchase price and other fair value adjustments
During the year ended December 31, 2021, we recorded a $206.8 million fair value adjustment related to the 51.0%
interest we retained in 220 East 42nd Street, which was deconsolidated when the Company sold a 49.0% joint venture interest
and the Company no longer retained a controlling interest in the entity, as defined in ASC 810.
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.
Gain (Loss) on Sale of Real Estate, Net
During the year ended December 31, 2021, we recognized gains on the sale of a 49.0% joint venture interest in 220 East
42nd Street ($172.7 million), and the sales of 635-641 Sixth Avenue ($99.2 million) and 410 Tenth Avenue ($15.7 million).
During the year ended December 31, 2020, we recognized gains on the sales of 315 West 33rd Street - "The
Olivia" ($72.3 million), the retail condominium at 609 Fifth Avenue ($65.4 million), 410 Tenth Avenue ($56.4 million), 15
Beekman ($17.7 million), Williamsburg Terrace ($11.8 million) and 400 East 58th Street ($8.3 million), offset by a loss on the
sale related to our interest in 1055 Washington Boulevard in Stamford, Connecticut ($11.5 million).
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11
The following table presents a summary of the commenced leasing activity for the year ended December 31, 2021 in our
Property Operating Expenses
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 portfolio:
Manhattan
Space available at beginning of the year
Sold vacancies
Property in redevelopment
Space which became available during the year(3)
1,717,735
(90,435)
(353,897)
1,028,198
65,834
4,487
1,098,519
2,371,922
• Office
• Retail
• Storage
• Office(4)
• Retail
• Storage
Early renewals
• Office
• Retail
• Storage
Total space available
Leased space commenced during the year:
Total leased space commenced
733,931
806,159 $
67.17 $
67.83 $
56.20
671,210
741,490 $
68.37 $
66.26 $
57,740
4,981
59,272 $
56.01 $
81.70 $
5,397 $
25.44 $
31.55 $
60.21
11.12
—
Total available space at end of year
1,637,991
Total early renewals
421,294
469,594 $
73.18 $
74.03 $
7.94
368,637
390,290 $
68.89 $
71.90 $
9.55
50,409
2,248
77,042 $
96.21 $
86.21 $
2,262 $
28.09 $
28.09 $
—
—
1,131,780 $
68.55 $
69.18 $
42.74
136,314 $
78.73 $
84.48 $
7,659 $
26.22 $
30.02 $
4.83
—
1,275,753 $
69.38 $
71.12 $
38.43
Total commenced leases, including replaced
previous vacancy
• Office
• Retail
• Storage
Total commenced leases
Annual initial base rent.
(1)
(2)
(3)
(4)
753,644 rentable square feet.
Investment Income
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 $62.27 per rentable square feet for 363,354 rentable square feet. Average
starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $65.70 per rentable square feet for
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, 2021 and 2020, the weighted
average balance of our debt and preferred equity investment portfolio and the weighted average yield were $1.1 billion and
7.1%, respectively, compared to $1.4 billion and 7.7%, respectively. As of December 31, 2021, the debt and preferred equity
investment portfolio had a weighted average term to maturity of 1.8 years excluding extension options.
Other Income
Other income decreased mainly due to lower lease termination income for the year ended December 31, 2021
($22.6 million) as compared to the same period in 2020 ($48.2 million), income, net of legal costs, derived from a legal
settlement during the year ended December 31, 2020 ($20.2 million), and development fee income earned during the year
ended December 31, 2020 ($7.3 million), partially offset by an increase in leasing and management fee income for the year
ended December 31, 2021 ($11.4 million).
6.4
1.6
1.5
6.0
2.2
0.6
0.5
1.9
5.0
1.1
1.2
4.5
8.5
10.7
4.9
8.7
2.8
4.4
1.4
3.1
6.6
7.2
3.9
6.6
Property operating expenses decreased primarily due to reduced variable expenses and real estate taxes at our Disposed
Properties ($9.9 million and $9.6 million, respectively). Further decreases resulted from reduced real estate taxes at our Same-
Store Properties, 220 East 42nd Street (which the Company sold a 49.0% joint venture interest) and our Acquisition Properties
($7.5 million, $4.2 million and $2.6 million, respectively), and decreased variable expenses at 750 Third Avenue and 220 East
42nd Street ($5.9 million and $5.5 million, respectively).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses increased to $94.9 million for the year ended December 31, 2021,
compared to $91.8 million for the same period in 2020 due primarily to an increase in rent expense and inflationary pressure on
compensation costs.
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 due to interest
capitalization in connection with properties that are under development ($9.5 million), lower interest expense from the
revolving credit facility ($8.3 million), senior unsecured notes ($8.2 million) and term loans ($6.6 million) resulting from a
decrease in the average LIBOR rate for the year ended December 31, 2021 as compared to the year ended December 31, 2020,
and the disposal of 315 West 33rd Street - "The Olivia" in 2020 ($3.4 million). The weighted average consolidated debt balance
outstanding was $4.8 billion for the year ended December 31, 2021, compared to $5.8 billion for the year ended December 31,
2020. The consolidated weighted average interest rate was 2.93% for the year ended December 31, 2021, as compared to 3.06%
for the year ended December 31, 2020.
Depreciation and Amortization
Depreciation and amortization decreased primarily due to accelerated depreciation at One Madison Avenue in the third
quarter of 2020 related to the property's redevelopment ($70.3 million), and decreased depreciation and amortization at our
Disposed properties ($20.7 million) and Same-Store Properties ($12.7 million).
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures increased primarily as a result of higher depreciation expense at One
Vanderbilt Avenue ($43.0 million), which was put in service during the fourth quarter of 2020, partially offset by an increase in
income from operations at 2 Herald Square ($7.5 million).
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2021, we recognized losses on the sales of our interest in One Madison Avenue
($26.9 million), 55 West 46th Street ($15.3 million) and 400 East 57th Street ($1.5 million), offset by a gain on the sale of our
interest in 605 West 42nd Street ($8.3 million). 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).
Purchase price and other fair value adjustments
During the year ended December 31, 2021, we recorded a $206.8 million fair value adjustment related to the 51.0%
interest we retained in 220 East 42nd Street, which was deconsolidated when the Company sold a 49.0% joint venture interest
and the Company no longer retained a controlling interest in the entity, as defined in ASC 810.
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.
Gain (Loss) on Sale of Real Estate, Net
During the year ended December 31, 2021, we recognized gains on the sale of a 49.0% joint venture interest in 220 East
42nd Street ($172.7 million), and the sales of 635-641 Sixth Avenue ($99.2 million) and 410 Tenth Avenue ($15.7 million).
During the year ended December 31, 2020, we recognized gains on the sales of 315 West 33rd Street - "The
Olivia" ($72.3 million), the retail condominium at 609 Fifth Avenue ($65.4 million), 410 Tenth Avenue ($56.4 million), 15
Beekman ($17.7 million), Williamsburg Terrace ($11.8 million) and 400 East 58th Street ($8.3 million), offset by a loss on the
sale related to our interest in 1055 Washington Boulevard in Stamford, Connecticut ($11.5 million).
10
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Depreciable Real Estate Reserves and Impairments
During the year ended December 31, 2021, we recognized depreciable real estate reserves and impairments related to 400
East 57th Street ($5.7 million) as well as investments under contract for sale as of December 31, 2021 in 707 Eleventh Avenue
($15.0 million) and the Stonehenge Properties ($3.1 million). During the year ended December 31, 2020, we recognized
depreciable real estate reserves and impairments related to 106 Spring Street ($39.7 million), 133 Greene Street ($14.1 million)
and 712 Madison Avenue ($6.6 million).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2021, we recorded $2.9 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.
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.
Comparison of the year ended December 31, 2020 to the year ended December 31, 2019
For a comparison of the year ended December 31, 2020 to the year ended December 31, 2019, 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, 2020, which was filed with the SEC on February 26, 2021.
Liquidity and Capital Resources
We currently expect that the 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.
The combined aggregate principal maturities of mortgages and other loans payable, the 2021 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, 2021 are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Senior unsecured notes
800,000
Property mortgages and
other loans
Revolving credit facility
Unsecured term loans
Trust preferred securities
Financing leases
Operating leases
Estimated interest expense
Joint venture debt
Total
$
457,589 $
56,583 $
338,017 $
812 $
841 $
580,618 $ 1,434,460
—
—
—
3,523
36,776
115,868
426,057
—
—
—
—
3,570
48,680
88,998
200,000
—
—
—
3,641
54,545
85,192
—
—
—
100,000
3,810
54,772
69,702
390,000
—
—
—
3,858
54,911
58,489
1,050,000
1,250,000
—
—
100,000
256,691
390,000
900,000
100,000
275,093
1,395,533
1,645,217
38,688
456,937
750,696
616,510
1,391,185
150,486
2,435,913
5,770,847
$ 1,839,813 $
948,527 $ 1,297,905 $ 1,620,281 $
658,585 $ 5,857,443 $ 12,222,554
We estimate that for the year ending December 31, 2022, we expect to incur $82.4 million of recurring capital
expenditures on existing consolidated properties and $107.8 million of development or redevelopment expenditures on existing
consolidated properties, of which $3.5 million will be funded by construction financing facilities or loan reserves. We expect
our share of capital expenditures at our joint venture properties will be $219.3 million, of which $125.8 million will be funded
by construction financing facilities or loan reserves. We expect to fund 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.
As of December 31, 2021, we had liquidity of $1.1 billion, comprised of $860.0 million of availability under our
revolving credit facility and $286.2 million of consolidated cash on hand, inclusive of $34.8 million of marketable securities.
This liquidity excludes $132.1 million representing our share of cash at unconsolidated joint venture properties. We may seek to
divest of properties, interests in properties, or 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
refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt and other 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 $337.0 million and $372.8 million as of December 31, 2021 and 2020,
respectively, representing a decrease of $35.8 million. The decrease was a result of the following changes in cash flows (in
Year Ended December 31,
2021
2020
(Decrease)
Increase
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
$
$
$
255,979 $
993,581 $
(1,285,371) $
554,236 $
1,056,430 $
(1,479,301) $
(298,257)
(62,849)
193,930
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 generate a relatively consistent stream of cash flow that provides us with
resources to pay operating expenses, debt service, and fund dividend and distribution requirements.
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13
Depreciable Real Estate Reserves and Impairments
During the year ended December 31, 2021, we recognized depreciable real estate reserves and impairments related to 400
East 57th Street ($5.7 million) as well as investments under contract for sale as of December 31, 2021 in 707 Eleventh Avenue
($15.0 million) and the Stonehenge Properties ($3.1 million). During the year ended December 31, 2020, we recognized
depreciable real estate reserves and impairments related to 106 Spring Street ($39.7 million), 133 Greene Street ($14.1 million)
and 712 Madison Avenue ($6.6 million).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2021, we recorded $2.9 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.
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.
Comparison of the year ended December 31, 2020 to the year ended December 31, 2019
For a comparison of the year ended December 31, 2020 to the year ended December 31, 2019, 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, 2020, which was filed with the SEC on February 26, 2021.
Liquidity and Capital Resources
We currently expect that the 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.
The combined aggregate principal maturities of mortgages and other loans payable, the 2021 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, 2021 are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Property mortgages and
other loans
Revolving credit facility
Unsecured term loans
Senior unsecured notes
Trust preferred securities
Financing leases
Operating leases
Estimated interest expense
Joint venture debt
Total
$
457,589 $
56,583 $
338,017 $
812 $
841 $
580,618 $ 1,434,460
—
—
800,000
—
3,523
36,776
115,868
426,057
—
—
—
—
3,570
48,680
88,998
—
200,000
—
—
3,641
54,545
85,192
—
—
100,000
—
3,810
54,772
69,702
390,000
—
390,000
—
—
—
3,858
54,911
58,489
1,050,000
1,250,000
—
100,000
256,691
900,000
100,000
275,093
1,395,533
1,645,217
38,688
456,937
750,696
616,510
1,391,185
150,486
2,435,913
5,770,847
$ 1,839,813 $
948,527 $ 1,297,905 $ 1,620,281 $
658,585 $ 5,857,443 $ 12,222,554
We estimate that for the year ending December 31, 2022, we expect to incur $82.4 million of recurring capital
expenditures on existing consolidated properties and $107.8 million of development or redevelopment expenditures on existing
consolidated properties, of which $3.5 million will be funded by construction financing facilities or loan reserves. We expect
our share of capital expenditures at our joint venture properties will be $219.3 million, of which $125.8 million will be funded
by construction financing facilities or loan reserves. We expect to fund 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.
As of December 31, 2021, we had liquidity of $1.1 billion, comprised of $860.0 million of availability under our
revolving credit facility and $286.2 million of consolidated cash on hand, inclusive of $34.8 million of marketable securities.
This liquidity excludes $132.1 million representing our share of cash at unconsolidated joint venture properties. We may seek to
divest of properties, interests in properties, or 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
refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt and other 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 $337.0 million and $372.8 million as of December 31, 2021 and 2020,
respectively, representing a decrease of $35.8 million. The decrease was a result of the following changes in cash flows (in
thousands):
Year Ended December 31,
2021
2020
(Decrease)
Increase
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
$
$
$
255,979 $
993,581 $
(1,285,371) $
554,236 $
1,056,430 $
(1,479,301) $
(298,257)
(62,849)
193,930
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 generate a relatively consistent stream of cash flow that provides us with
resources to pay operating expenses, debt service, and fund dividend and distribution requirements.
12
13
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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, 2021, when compared to the year ended December 31, 2020, we used cash primarily for the following
investing activities (in thousands):
Acquisitions of real estate
Capital expenditures and capitalized interest
Joint venture investments
Distributions from joint ventures
Proceeds from sales of real estate/partial interest in property
Cash assumed from consolidation of real estate investment
Debt and preferred equity and other investments
Decrease in net cash provided by investing activities
$
(65,945)
155,654
(18,557)
646,032
(460,788)
9,475
(328,720)
$
(62,849)
Funds spent on capital expenditures, which are comprised of building and tenant improvements, decreased from $458.1
million for the year ended December 31, 2020 to $302.5 million for the year ended December 31, 2021 due to lower 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, 2021, when compared to the year ended December 31, 2020,
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
$
(1,149,203)
878,784
63,599
59,692
550
187,080
76,710
1,536
22,921
$
141,669
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, 2021, 2020, and 2019, respectively (dollars in
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, 2021, 64,105,276 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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.
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15
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 21, 2022. On January 10, 2022, 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
1.03060-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 $1.0 billion share repurchase program under which we could buy
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.
As of December 31, 2021, share repurchases, excluding the redemption of OP units, executed under the program were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
share
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
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.
thousands):
Shares of common stock issued
Year Ended December 31,
2021
2020
2019
10,387
16,181
3,645
334
Dividend reinvestments/stock purchases under the DRSPP
$
738 $
1,006 $
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, 2021, 2.0 million fungible units were available for issuance
under the 2005 Plan after reserving for shares underlying outstanding restricted stock units and phantom stock units granted
pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.
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, 2021, when compared to the year ended December 31, 2020, we used cash primarily for the following
Funds spent on capital expenditures, which are comprised of building and tenant improvements, decreased from $458.1
million for the year ended December 31, 2020 to $302.5 million for the year ended December 31, 2021 due to lower 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, 2021, when compared to the year ended December 31, 2020,
we used cash for the following financing activities (in thousands):
investing activities (in thousands):
Acquisitions of real estate
Capital expenditures and capitalized interest
Joint venture investments
Distributions from joint ventures
Proceeds from sales of real estate/partial interest in property
Cash assumed from consolidation of real estate investment
Debt and preferred equity and other investments
Decrease in net cash provided by investing activities
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
$
(65,945)
155,654
(18,557)
646,032
(460,788)
9,475
(328,720)
$
(62,849)
$
(1,149,203)
878,784
63,599
59,692
550
187,080
76,710
1,536
22,921
$
141,669
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, 2021, 64,105,276 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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 $1.0 billion share repurchase program under which we could buy
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.
As of December 31, 2021, share repurchases, excluding the redemption of OP units, executed under the program were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Shares repurchased
Average price paid per
share
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
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, 2021, 2020, and 2019, respectively (dollars in
thousands):
Year Ended December 31,
2021
2020
2019
Shares of common stock issued
10,387
16,181
Dividend reinvestments/stock purchases under the DRSPP
$
738 $
1,006 $
3,645
334
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, 2021, 2.0 million fungible units were available for issuance
under the 2005 Plan after reserving for shares underlying outstanding restricted stock units and phantom stock units granted
pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.
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15
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Deferred Compensation Plan for Directors
Indebtedness
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, 2021, 24,426 phantom stock units and 12,312 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, 2021 related
to the Deferred Compensation Plan. As of December 31, 2021, there were 165,201 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 provide 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, 2021, 172,421 shares of our common stock had been issued under the ESPP.
The table below summarizes our consolidated mortgages and other loans payable, 2021 credit facility, senior unsecured
notes and trust preferred securities outstanding as of December 31, 2021 and 2020, (amounts 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,
2021
2020
$
$
1,974,324
$
1,300,000
3,274,324
801,051
4,075,375
$
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 %
294,970
506,081
80.3 %
19.7 %
100.0 %
3.14 %
2.11 %
3.02 %
(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 13.4% and 32.1% as of December 31, 2021 and December 31, 2020, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.10% and 0.14%
as of December 31, 2021 and 2020, respectively). As of December 6, 2021, the variable rate for our 2021 Credit facility bears
interest at an interest rate based on adjusted Term SOFR (0.05% as of December 31, 2021). Our consolidated debt as of
December 31, 2021 had a weighted average term to maturity of 3.64 years.
Certain of our debt and equity investments and other investments, with carrying values of $295.0 million as of
December 31, 2021 and $345.9 million as of December 31, 2020, are variable rate investments, which mitigate our exposure to
interest rate changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net ratio of
our variable rate debt to total debt was 13.4% and 32.1% as of December 31, 2021 and 2020, respectively.
Mortgage Financing
As of December 31, 2021, our total mortgage debt (excluding our share of joint venture mortgage debt of $5.8 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 $0.4 billion of variable rate debt with an effective weighted average interest rate of 2.45%.
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17
Deferred Compensation Plan for Directors
Indebtedness
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee
The table below summarizes our consolidated mortgages and other loans payable, 2021 credit facility, senior unsecured
directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless
notes and trust preferred securities outstanding as of December 31, 2021 and 2020, (amounts in thousands).
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, 2021, 24,426 phantom stock units and 12,312 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, 2021 related
to the Deferred Compensation Plan. As of December 31, 2021, there were 165,201 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 provide 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, 2021, 172,421 shares of our common stock had been issued under the ESPP.
Debt Summary:
Balance
Fixed rate
Variable rate—hedged
Total fixed rate
Total variable rate
Total debt
Debt, preferred equity, and other investments subject to variable rate
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,
2021
2020
$
$
1,974,324
$
1,300,000
3,274,324
801,051
4,075,375
$
294,970
506,081
80.3 %
19.7 %
100.0 %
3.14 %
2.11 %
3.02 %
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 %
(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 13.4% and 32.1% as of December 31, 2021 and December 31, 2020, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.10% and 0.14%
as of December 31, 2021 and 2020, respectively). As of December 6, 2021, the variable rate for our 2021 Credit facility bears
interest at an interest rate based on adjusted Term SOFR (0.05% as of December 31, 2021). Our consolidated debt as of
December 31, 2021 had a weighted average term to maturity of 3.64 years.
Certain of our debt and equity investments and other investments, with carrying values of $295.0 million as of
December 31, 2021 and $345.9 million as of December 31, 2020, are variable rate investments, which mitigate our exposure to
interest rate changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net ratio of
our variable rate debt to total debt was 13.4% and 32.1% as of December 31, 2021 and 2020, respectively.
Mortgage Financing
As of December 31, 2021, our total mortgage debt (excluding our share of joint venture mortgage debt of $5.8 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 $0.4 billion of variable rate debt with an effective weighted average interest rate of 2.45%.
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Corporate Indebtedness
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was
previously amended by the Company in November 2017, or the 2017 credit facility, and was originally entered into by the
Company in November 2012, or the 2012 credit facility. As of December 31, 2021, the 2021 credit facility consisted of a $1.25
billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan
B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has
two six-month as-of-right extension options to May 15, 2027. 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, 2021, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points
with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans
under the revolving credit facility, (ii) 80 basis points to 160 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.
As of December 31, 2021, the applicable spread over adjusted Term SOFR plus 10 basis points was 85 basis points for
the revolving credit facility, 95 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, 2021, the facility
fee was 20 basis points.
As of December 31, 2021, we had $2.0 million of outstanding letters of credit, $390.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $860.0 million under
the 2021 credit facility. As of December 31, 2021 and December 31, 2020, the revolving credit facility had a carrying value of
$381.3 million and $105.3 million, respectively, net of deferred financing costs. As of December 31, 2021 and December 31,
2020, the term loan facilities had a carrying value of $1.2 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 2021 credit facility.
The 2021 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. As a result of a Final Ruling from the Federal Housing Finance Authority, the regulator of the Federal Home Loan
Bank system, all captive insurance company memberships were terminated as of February 2021. As such, all advances to
Ticonderoga were repaid prior to such termination.
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, 2021, 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 2022. As of December 31, 2021, 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, 2021 and 2020,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
October 5, 2017 (2)
November 15, 2012 (3)
December 17, 2015 (4)
August 7, 2018
December
31,
2021
Unpaid
Principal
Balance
December
December
31,
2021
Accreted
Balance
31,
2020
Accreted
Balance
$
500,000 $
499,913 $
499,803
300,000
100,000
—
301,002
100,000
—
302,086
100,000
350,000
900,000 $
900,915 $ 1,251,889
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
3.25 %
4.50 %
4.27 %
— %
5 October 2022
10 December 2022
10 December 2025
3 August 2021
Deferred financing costs, net
(1,607)
(3,670)
900,000 $
899,308 $ 1,248,219
$
$
Interest rate as of December 31, 2021, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
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)
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
Restrictive Covenants
The terms of the 2021 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, 2021 and 2020, 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, 2021, 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 $4.8 million and would increase our share of joint venture annual interest cost by
$13.8 million. As of December 31, 2021, $295.0 million, or 27.1%, of our $1.1 billion debt and preferred equity portfolio was
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
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 income until the hedged item is recognized in earnings.
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19
Corporate Indebtedness
2021 Credit Facility
Senior Unsecured Notes
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2021 and 2020,
previously amended by the Company in November 2017, or the 2017 credit facility, and was originally entered into by the
respectively, by scheduled maturity date (dollars in thousands):
Company in November 2012, or the 2012 credit facility. As of December 31, 2021, the 2021 credit facility consisted of a $1.25
billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan
B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has
two six-month as-of-right extension options to May 15, 2027. 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, 2021, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points
with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans
under the revolving credit facility, (ii) 80 basis points to 160 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.
As of December 31, 2021, the applicable spread over adjusted Term SOFR plus 10 basis points was 85 basis points for
the revolving credit facility, 95 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, 2021, the facility
fee was 20 basis points.
As of December 31, 2021, we had $2.0 million of outstanding letters of credit, $390.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $860.0 million under
the 2021 credit facility. As of December 31, 2021 and December 31, 2020, the revolving credit facility had a carrying value of
$381.3 million and $105.3 million, respectively, net of deferred financing costs. As of December 31, 2021 and December 31,
2020, the term loan facilities had a carrying value of $1.2 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 2021 credit facility.
The 2021 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. As a result of a Final Ruling from the Federal Housing Finance Authority, the regulator of the Federal Home Loan
Bank system, all captive insurance company memberships were terminated as of February 2021. As such, all advances to
Ticonderoga were repaid prior to such termination.
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, 2021, 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 2022. As of December 31, 2021, the facility had no outstanding balance.
Issuance
October 5, 2017 (2)
November 15, 2012 (3)
December 17, 2015 (4)
August 7, 2018
Deferred financing costs, net
December
31,
2021
Unpaid
Principal
Balance
December
31,
2021
Accreted
Balance
December
31,
2020
Accreted
Balance
$
500,000 $
499,913 $
499,803
300,000
100,000
—
301,002
100,000
—
302,086
100,000
350,000
900,000 $
900,915 $ 1,251,889
(1,607)
(3,670)
900,000 $
899,308 $ 1,248,219
$
$
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
3.25 %
4.50 %
4.27 %
— %
5 October 2022
10 December 2022
10 December 2025
3 August 2021
(1)
(2)
(3)
(4)
Interest rate as of December 31, 2021, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
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.
Restrictive Covenants
The terms of the 2021 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, 2021 and 2020, 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, 2021, 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 $4.8 million and would increase our share of joint venture annual interest cost by
$13.8 million. As of December 31, 2021, $295.0 million, or 27.1%, of our $1.1 billion debt and preferred equity portfolio was
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
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 income until the hedged item is recognized in earnings.
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Our long-term debt of $3.3 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, 2021 bore
interest based on a spread to LIBOR of 120 basis points to 340 basis points, and adjusted Term SOFR of 95 basis points to 105
basis points.
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.
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, interest on our debt and preferred equity
portfolio, and asset sales.
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.
Before we pay any cash dividend, whether for Federal income tax purposes or otherwise, which would only be paid out
of available cash to the extent permitted under the 2021 credit facility and senior unsecured notes, we must first meet both our
operating requirements and scheduled debt service on our mortgages and loans payable.
Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, 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. 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 $1.7 million, $1.4 million and $3.9 million for the years ended December 31, 2021, 2020 and 2019,
respectively.
We also recorded expenses, inclusive of capitalized expenses, of $14.0 million, $13.3 million and $18.8 million for the
years ended December 31, 2021, 2020 and 2019, 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 $0.7 million, $0.6 million and $0.6 million for the
years ended December 31, 2021, 2020, and 2019 respectively.
One Vanderbilt Avenue 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.
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. As of December 31, 2021, stabilization of the property was achieved.
One Vanderbilt Avenue Leases
In November 2018, we entered into a lease agreement with the One Vanderbilt Avenue joint venture covering certain
floors at the property. In March 2021, the lease commenced and we relocated our corporate headquarters to the leased space.
For the year ended December 31, 2021, we recorded $2.4 million of rent expense under the lease. Additionally, in June 2021,
we entered into a lease agreement with the One Vanderbilt joint venture for SUMMIT One Vanderbilt, which commenced in
October 2021. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under the lease. See Note 20,
“Commitments and Contingencies.”
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 development projects. 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.
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21
Our long-term debt of $3.3 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected
One Vanderbilt Avenue 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.
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. As of December 31, 2021, stabilization of the property was achieved.
Before we pay any cash dividend, whether for Federal income tax purposes or otherwise, which would only be paid out
One Vanderbilt Avenue Leases
In November 2018, we entered into a lease agreement with the One Vanderbilt Avenue joint venture covering certain
floors at the property. In March 2021, the lease commenced and we relocated our corporate headquarters to the leased space.
For the year ended December 31, 2021, we recorded $2.4 million of rent expense under the lease. Additionally, in June 2021,
we entered into a lease agreement with the One Vanderbilt joint venture for SUMMIT One Vanderbilt, which commenced in
October 2021. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under the lease. See Note 20,
“Commitments and Contingencies.”
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 development projects. 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.
by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of December 31, 2021 bore
interest based on a spread to LIBOR of 120 basis points to 340 basis points, and adjusted Term SOFR of 95 basis points to 105
basis points.
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.
Dividends/Distributions
portfolio, and asset sales.
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, interest on our debt and preferred equity
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.
of available cash to the extent permitted under the 2021 credit facility and senior unsecured notes, we must first meet both our
operating requirements and scheduled debt service on our mortgages and loans payable.
Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, 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. 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 $1.7 million, $1.4 million and $3.9 million for the years ended December 31, 2021, 2020 and 2019,
We also recorded expenses, inclusive of capitalized expenses, of $14.0 million, $13.3 million and $18.8 million for the
years ended December 31, 2021, 2020 and 2019, 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 $0.7 million, $0.6 million and $0.6 million for the
years ended December 31, 2021, 2020, and 2019 respectively.
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Funds from Operations
Climate Change
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, 2021, 2020, and 2019 are as follows (in thousands):
Net income attributable to SL Green common stockholders
$
434,804 $
356,105 $
255,484
Forward-Looking Information
Year Ended December 31,
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies - Accounting Standards
2021
2020
2019
Updates" in the accompanying consolidated financial statements.
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Less:
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/
real estate
Depreciable real estate reserves and impairments
Gain 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
216,869
249,087
23,573
313,668
205,869
34,956
272,358
192,426
10,142
(32,757)
2,961
76,181
(23,794)
287,417
209,443
2,790
(60,454)
215,506
187,522
2,338
481,234 $
255,979 $
562,725 $
554,236 $
993,581 $
1,056,430 $
(7,047)
(16,749)
69,389
2,935
605,701
376,473
114,494
(1,285,371) $
(1,479,301) $
(528,650)
$
$
$
$
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 CPI 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.
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22
23
With our roots in New York City, we are at the center of one of the world's most ambitious climate legislative
environments. Through the Climate Leadership and Community Protection Act signed into law in 2019, New York State
mandated the adoption of a net-zero carbon economy statewide by 2050, with a zero-carbon electricity grid by 2040. New York
City enacted Local Law 97 (LL97) in 2019 under the Climate Mobilization Act, setting carbon caps for large buildings starting
in 2024 as part of a broader commitment to reducing greenhouse gas emissions by 40% by 2030, and by 80% by 2050. As our
portfolio is principally located in Manhattan, these policy elements represent the most material sources of transition risks
relevant to our business.
While SL Green's portfolio has not been substantially affected by climate-related events to New York City real estate,
such as Hurricane Sandy in 2012, we have continued to develop our approach to physical climate risk assessment, management,
and mitigation in order to manage and minimize the impacts of future events. We have conducted climate-related scenario
analyses as part of our first Task Force on Climate-related Financial Disclosures ("TCFD") report published in 2021, which we
made available on our website.
We consider the successful management and mitigation of climate-related risks across our portfolio as an opportunity to
raise the financial value of our buildings and pass on these benefits to our stakeholders, tenants, and investors. We believe our
investments over the last 20 years in energy efficiency improvements and greenhouse gas emissions reductions have minimized
the impact of climate legislation on our portfolio and our active development pipeline sets the standard for sustainable new
construction and responsible community engagement. We leverage years of operational excellence to incorporate innovative
design and technological solutions. We also utilize recommendations from our portfolio-wide New York State Energy Research
and Development Authority ("NYSERDA") emissions reduction study to help lower emissions from tenant spaces and base
building operations. Together, these measures are expected to minimize our vulnerability to the physical risks of climate
change, as well as transition risks covering policy and legal, market, technology, and reputational factors.
Accounting Standards Updates
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;
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;
•
•
•
•
•
•
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, 2021, 2020, and 2019 are as follows (in thousands):
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/
(32,757)
2,961
76,181
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Less:
real estate
Depreciable real estate reserves and impairments
Gain on sale of real estate, net
Purchase price and other fair value adjustment
Depreciation on non-rental real estate assets
holders
Cash flows provided by operating activities
Cash flows provided by investing activities
Cash flows used in financing activities
Inflation
Funds from Operations attributable to SL Green common stockholders and unit
216,869
249,087
23,573
(23,794)
287,417
209,443
2,790
313,668
205,869
34,956
(60,454)
215,506
187,522
2,338
272,358
192,426
10,142
(7,047)
(16,749)
69,389
2,935
605,701
376,473
114,494
481,234 $
255,979 $
562,725 $
554,236 $
993,581 $
1,056,430 $
$
$
$
$
(1,285,371) $
(1,479,301) $
(528,650)
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 CPI 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.
Funds from Operations
Climate Change
With our roots in New York City, we are at the center of one of the world's most ambitious climate legislative
environments. Through the Climate Leadership and Community Protection Act signed into law in 2019, New York State
mandated the adoption of a net-zero carbon economy statewide by 2050, with a zero-carbon electricity grid by 2040. New York
City enacted Local Law 97 (LL97) in 2019 under the Climate Mobilization Act, setting carbon caps for large buildings starting
in 2024 as part of a broader commitment to reducing greenhouse gas emissions by 40% by 2030, and by 80% by 2050. As our
portfolio is principally located in Manhattan, these policy elements represent the most material sources of transition risks
relevant to our business.
While SL Green's portfolio has not been substantially affected by climate-related events to New York City real estate,
such as Hurricane Sandy in 2012, we have continued to develop our approach to physical climate risk assessment, management,
and mitigation in order to manage and minimize the impacts of future events. We have conducted climate-related scenario
analyses as part of our first Task Force on Climate-related Financial Disclosures ("TCFD") report published in 2021, which we
made available on our website.
We consider the successful management and mitigation of climate-related risks across our portfolio as an opportunity to
raise the financial value of our buildings and pass on these benefits to our stakeholders, tenants, and investors. We believe our
investments over the last 20 years in energy efficiency improvements and greenhouse gas emissions reductions have minimized
the impact of climate legislation on our portfolio and our active development pipeline sets the standard for sustainable new
construction and responsible community engagement. We leverage years of operational excellence to incorporate innovative
design and technological solutions. We also utilize recommendations from our portfolio-wide New York State Energy Research
and Development Authority ("NYSERDA") emissions reduction study to help lower emissions from tenant spaces and base
building operations. Together, these measures are expected to minimize our vulnerability to the physical risks of climate
change, as well as transition risks covering policy and legal, market, technology, and reputational factors.
Accounting Standards Updates
Net income attributable to SL Green common stockholders
$
434,804 $
356,105 $
255,484
Forward-Looking Information
Year Ended December 31,
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies - Accounting Standards
2021
2020
2019
Updates" in the accompanying consolidated financial statements.
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;
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;
22
23
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•
•
•
•
•
•
•
•
•
•
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy,
and increasing availability of sublease space;
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.
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 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, 2021 (in thousands):
Long-Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
Debt and Preferred
Equity Investments (1)
Amount
Weighted
Yield
$
1,006,538
3.38 % $
251,051
1.85 % $
468,306
10.17 %
6,583
478,017
100,812
841
1,680,618
3,273,409
3,336,463
3.42 %
3.39 %
3.32 %
3.17 %
2.70 %
3.35 % $
$
$
$
50,000
60,000
—
390,000
50,000
801,051
800,672
2.18 %
2.40 %
2.44 %
2.57 %
3.08 %
396,042
4.40 %
6,890
30,000
—
187,485
— %
8.40 %
— %
6.94 %
7.40 %
2.22 % $
1,088,723
(1)
Our debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion as of December 31, 2021.
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, 2021 (in thousands):
Long Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
$
$
$
220,358
270,610
16,494
1,261,456
107,214
2,435,792
4,311,924
4,233,695
3.63 % $
3.47 %
3.41 %
3.32 %
3.18 %
2.93 %
205,699
480,086
600,016
129,729
43,272
121
3.43 % $
1,458,923
$
1,461,761
2.61 %
3.77 %
4.14 %
5.40 %
6.18 %
5.57 %
3.40 %
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
70310_10K_r2.indd 24
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24
25
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy,
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, 2021 (in thousands):
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.
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
Long-Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
Debt and Preferred
Equity Investments (1)
Amount
Weighted
Yield
$
1,006,538
3.38 % $
251,051
1.85 % $
468,306
10.17 %
6,583
478,017
100,812
841
1,680,618
3,273,409
3,336,463
3.42 %
3.39 %
3.32 %
3.17 %
2.70 %
3.35 % $
$
$
$
50,000
60,000
—
390,000
50,000
801,051
800,672
2.18 %
2.40 %
2.44 %
2.57 %
3.08 %
396,042
4.40 %
6,890
30,000
—
187,485
— %
8.40 %
— %
6.94 %
7.40 %
2.22 % $
1,088,723
(1)
Our debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion as of December 31, 2021.
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, 2021 (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
Long Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
$
$
$
220,358
270,610
16,494
1,261,456
107,214
2,435,792
4,311,924
4,233,695
3.63 % $
3.47 %
3.41 %
3.32 %
3.18 %
2.93 %
205,699
480,086
600,016
129,729
43,272
121
3.43 % $
1,458,923
$
1,461,761
2.61 %
3.77 %
4.14 %
5.40 %
6.18 %
5.57 %
3.40 %
24
25
70310_10K_r2.indd 25
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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, 2021 (in thousands):
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
SOFR
SOFR
SOFR
SOFR
200,000
1.131 % November 2021
LIBOR
100,000
1.161 % November 2021
July 2023
July 2023
(733)
(1,371)
LIBOR
400,000
0.184 %
January 2022
February 2023
1,519
Mortgage
Mortgage
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Asset
Hedged
Mortgage
Mortgage
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
LIBOR
$ 85,000
4.000 %
March 2021
March 2022 $
LIBOR
111,869
3.500 % November 2021
November 2022
—
1
Credit Facility
SOFR
100,000
0.212 %
January 2021
January 2023
376
150,000
2.696 %
December 2021
January 2024
(5,625)
150,000
2.721 %
December 2021
January 2026
(9,369)
200,000
2.740 %
December 2021
January 2026 (12,814)
Less: accumulated depreciation
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
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
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, 2021
December 31, 2020
$
1,350,701 $
3,671,402
1,645,081
—
983,723
7,650,907
(1,896,199)
5,754,708
140,855
251,417
85,567
34,752
47,616
29,408
248,313
1,088,723
2,997,934
124,495
262,841
1,394,386 $
381,334
1,242,002
899,308
12,698
195,390
157,571
107,275
102,914
851,370
187,372
52,309
64,120
100,000
5,748,049
344,252
196,075
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
11,066,629 $
11,707,567
$
$
Total Consolidated Hedges
$ (28,016)
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 $8.8 million in the aggregate as of
December 31, 2021. We also swapped certain floating rate debt at some of our joint ventures. These swaps represented a
liability of $3.6 million in the aggregate as of December 31, 2021.
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Asset
Hedged
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
LIBOR
$ 220,000
4.000 %
February 2020
February 2022 $
—
LIBOR
1,075,000
2.850 % September 2021
September 2022
LIBOR
125,000
2.850 % September 2021
September 2022
LIBOR
23,000
4.750 %
January 2021
January 2023
5
1
1
LIBOR
510,000
3.000 %
December 2021
June 2023
155
LIBOR
1,250,000
1.250 % November 2020
October 2024
8,657
LIBOR
177,000
1.669 %
March 2016
February 2026
(3,560)
Mortgages and other loans payable, net
Total Unconsolidated Hedges
$ 5,259
Debt and preferred equity investments, net of discounts and deferred origination fees of
$5,057 and $11,232 and allowances of $6,630 and $13,213 in 2021 and 2020, respectively
Investments in unconsolidated joint ventures
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26
27
The table below lists our consolidated derivative instruments, which are hedging variable rate debt, and their related fair
values as of December 31, 2021 (in thousands):
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Asset
Hedged
Mortgage
Mortgage
Mortgage
Mortgage
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
SOFR
100,000
0.212 %
January 2021
January 2023
376
LIBOR
400,000
0.184 %
January 2022
February 2023
1,519
LIBOR
100,000
1.161 % November 2021
200,000
1.131 % November 2021
July 2023
July 2023
(733)
(1,371)
150,000
2.696 %
December 2021
January 2024
(5,625)
150,000
2.721 %
December 2021
January 2026
(9,369)
SOFR
SOFR
SOFR
SOFR
Total Consolidated Hedges
$ (28,016)
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 $8.8 million in the aggregate as of
December 31, 2021. We also swapped certain floating rate debt at some of our joint ventures. These swaps represented a
liability of $3.6 million in the aggregate as of December 31, 2021.
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Asset
Hedged
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
LIBOR
$ 220,000
4.000 %
February 2020
February 2022 $
—
LIBOR
1,075,000
2.850 % September 2021
September 2022
LIBOR
125,000
2.850 % September 2021
September 2022
LIBOR
23,000
4.750 %
January 2021
January 2023
5
1
1
LIBOR
510,000
3.000 %
December 2021
June 2023
155
LIBOR
1,250,000
1.250 % November 2020
October 2024
8,657
Total Unconsolidated Hedges
$ 5,259
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
LIBOR
$ 85,000
4.000 %
March 2021
March 2022 $
Assets
LIBOR
111,869
3.500 % November 2021
November 2022
Commercial real estate properties, at cost:
—
1
Land and land interests
Building and improvements
Building leasehold and improvements
Right of use asset - financing leases
Right of use asset - operating leases
200,000
2.740 %
December 2021
January 2026 (12,814)
Less: accumulated depreciation
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
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
$5,057 and $11,232 and allowances of $6,630 and $13,213 in 2021 and 2020, respectively
Investments in unconsolidated joint ventures
Deferred costs, net
Other assets
Total assets (1)
Liabilities
LIBOR
177,000
1.669 %
March 2016
February 2026
(3,560)
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, 2021
December 31, 2020
$
1,350,701 $
3,671,402
1,645,081
—
983,723
7,650,907
(1,896,199)
5,754,708
140,855
251,417
85,567
34,752
47,616
29,408
248,313
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
$
$
1,088,723
1,076,542
2,997,934
124,495
262,841
3,823,322
177,168
448,213
11,066,629 $
11,707,567
1,394,386 $
381,334
1,242,002
899,308
12,698
195,390
157,571
107,275
102,914
851,370
187,372
52,309
64,120
100,000
5,748,049
344,252
196,075
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
26
27
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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, 2021 and 2020
Common stock, $0.01 par value, 160,000 shares authorized and 65,132 and 67,470 issued
and outstanding at December 31, 2021 and 2020, respectively (including 1,027 and 996
shares held in treasury at December 31, 2021 and 2020, 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, 2021
December 31, 2020
221,932
221,932
672
3,739,409
(126,160)
(46,758)
975,781
4,764,876
13,377
4,778,253
$
11,066,629 $
716
3,862,949
(124,049)
(67,247)
1,015,462
4,909,763
26,032
4,935,795
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: $193.4 million and $41.2 million of land,
$336.9 million and $57.9 million of building and improvements, $— million and $2.0 million of building and leasehold improvements, $15.4 million and
$37.8 million of right of use assets, $11.7 million and $10.3 million of accumulated depreciation, $574.4 million and $289.5 million of other assets included
in other line items, $418.9 million and $94.0 million of real estate debt, net, $0.8 million and $0.7 million of accrued interest payable, $15.3 million and $29.9
million of lease liabilities, and $145.2 million and $56.6 million of other liabilities included in other line items as of December 31, 2021 and December 31,
2020, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended December 31,
2021
2020
2019
$
678,176 $
804,423 $
1,052,744
1,238,995
Operating expenses, including related party expenses of $12,377 in 2021,
$12,643 in 2020 and $18,106 in 2019
167,153
183,200
234,676
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Real estate taxes
Operating lease rent
Loan loss and other investment reserves, net of recoveries
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Transaction related costs
Marketing, general and administrative
Total expenses
Equity in net loss from unconsolidated joint ventures
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain 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:
80,340
85,475
843,991
152,835
26,554
70,891
11,424
216,869
2,931
3,773
94,912
747,342
(55,402)
(32,757)
210,070
287,417
(23,794)
(1,551)
480,632
(25,457)
1,884
(7,305)
449,754
(14,950)
120,163
128,158
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)
Net income attributable to SL Green common stockholders
434,804 $
356,105 $
$
$
$
6.57 $
6.50 $
5.03 $
5.01 $
Basic weighted average common shares outstanding
Diluted weighted average common shares and common share equivalents
outstanding
65,740
70,769
70,397
75,078
The accompanying notes are an integral part of these consolidated financial statements.
983,557
195,590
59,848
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)
255,484
3.29
3.28
77,057
81,865
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28
29
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, 2021 and 2020
Common stock, $0.01 par value, 160,000 shares authorized and 65,132 and 67,470 issued
and outstanding at December 31, 2021 and 2020, respectively (including 1,027 and 996
shares held in treasury at December 31, 2021 and 2020, 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, 2021
December 31, 2020
221,932
221,932
672
3,739,409
(126,160)
(46,758)
975,781
4,764,876
13,377
4,778,253
716
3,862,949
(124,049)
(67,247)
1,015,462
4,909,763
26,032
4,935,795
11,707,567
$
11,066,629 $
(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: $193.4 million and $41.2 million of land,
$336.9 million and $57.9 million of building and improvements, $— million and $2.0 million of building and leasehold improvements, $15.4 million and
$37.8 million of right of use assets, $11.7 million and $10.3 million of accumulated depreciation, $574.4 million and $289.5 million of other assets included
in other line items, $418.9 million and $94.0 million of real estate debt, net, $0.8 million and $0.7 million of accrued interest payable, $15.3 million and $29.9
million of lease liabilities, and $145.2 million and $56.6 million of other liabilities included in other line items as of December 31, 2021 and December 31,
2020, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
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)
Year Ended December 31,
2021
2020
2019
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
$
678,176 $
804,423 $
80,340
85,475
843,991
120,163
128,158
983,557
195,590
59,848
1,052,744
1,238,995
Operating expenses, including related party expenses of $12,377 in 2021,
$12,643 in 2020 and $18,106 in 2019
167,153
183,200
234,676
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 from unconsolidated joint ventures
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain 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:
152,835
26,554
70,891
11,424
216,869
2,931
3,773
94,912
747,342
(55,402)
(32,757)
210,070
287,417
(23,794)
(1,551)
480,632
(25,457)
1,884
(7,305)
449,754
(14,950)
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)
$
$
$
434,804 $
356,105 $
6.57 $
6.50 $
5.03 $
5.01 $
Basic weighted average common shares outstanding
Diluted weighted average common shares and common share equivalents
outstanding
65,740
70,769
70,397
75,078
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)
255,484
3.29
3.28
77,057
81,865
The accompanying notes are an integral part of these consolidated financial statements.
28
29
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SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
Year Ended December 31,
2020
2019
2021
$
480,632 $
414,758 $
291,487
Net income
Other comprehensive loss:
Increase (decrease) in unrealized value of derivative instruments, including SL
Green's share of joint venture derivative instruments
Increase (decrease) in unrealized value of marketable securities
Other comprehensive income (loss)
Comprehensive income
Net income attributable to noncontrolling interests and preferred units
distributions
Other comprehensive (income) loss attributable to noncontrolling interests
21,427
104
21,531
502,163
(30,878)
(1,042)
(39,743)
(1,318)
(41,061)
373,697
(43,703)
2,299
Comprehensive income attributable to SL Green
$
470,243 $
332,293 $
(47,118)
1,249
(45,869)
245,618
(21,053)
2,276
226,841
The accompanying notes are an integral part of these consolidated financial statements.
Balance at December 31, 2018
$ 221,932
78,897
$ 847
$ 4,508,685
$ (124,049) $
15,108
$ 1,278,998
$
46,334
$ 5,947,855
Series I
Preferred
Stock
Shares (1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
(569)
334
471
4
5
99
2
25,761
(4,333)
(46)
(248,287)
(136,066)
Balance at December 31, 2019
$ 221,932
74,672
$ 803
$ 4,286,395
$ (124,049) $
(28,485) $ 1,084,719
$
75,883
$ 5,517,198
Balance at January 1, 2020
$ 221,932
74,672
$ 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
for 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
Cash distributions to noncontrolling interests
Cash distributions declared ($3.6434 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
for 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
Cash distributions to noncontrolling interests
Cash distributions declared ($4.9374 per common
share, none of which represented a return of
capital for federal income tax purposes)
Net income
Other comprehensive income
Preferred dividends
DRSPP proceeds
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
Sale of interest in partially owned entity
Cash distributions to noncontrolling interests
(3,123)
1,006
16
95
1
8,743
(33)
—
25,271
(8,276)
(88)
(455,343)
11
738
108
2
32,581
(4,474)
(46)
(281,206)
12
818
270,434
(3,159)
267,275
(25,276)
(25,845)
(43,593)
(14,950)
(43,593)
(14,950)
334
471
(34,320)
(34,320)
25,763
(384,399)
58,462
58,462
(478)
(478)
(279,377)
(279,377)
(39,184)
(39,184)
371,055
14,940
385,995
1,587
(38,762)
(14,950)
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
25,271
(76,831)
(532,262)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
449,754
(1,884)
447,870
20,489
32,598
(14,950)
(9,851)
(56,372)
20,489
(14,950)
738
(9,851)
32,583
(337,624)
818
336
(4,476)
(6,631)
336
(4,476)
(6,631)
Balance at December 31, 2020
$ 221,932
66,474
$ 716
$ 3,862,949
$ (124,049) $
(67,247) $ 1,015,462
$
26,032
$ 4,935,795
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30
31
SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
Year Ended December 31,
2021
2020
2019
$
480,632 $
414,758 $
291,487
Net income
Other comprehensive loss:
Increase (decrease) in unrealized value of derivative instruments, including SL
Green's share of joint venture derivative instruments
Increase (decrease) in unrealized value of marketable securities
Other comprehensive income (loss)
Comprehensive income
Net income attributable to noncontrolling interests and preferred units
distributions
Other comprehensive (income) loss attributable to noncontrolling interests
21,427
104
21,531
502,163
(30,878)
(1,042)
(39,743)
(1,318)
(41,061)
373,697
(43,703)
2,299
Comprehensive income attributable to SL Green
$
470,243 $
332,293 $
(47,118)
1,249
(45,869)
245,618
(21,053)
2,276
226,841
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
Balance at December 31, 2018
$ 221,932
78,897
$ 847
$ 4,508,685
$ (124,049) $
15,108
$ 1,278,998
$
46,334
$ 5,947,855
Series I
Preferred
Stock
Shares (1)
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Net income
Acquisition of subsidiary interest from
noncontrolling interest
Other comprehensive loss
Preferred dividends
DRSPP proceeds
Conversion of units in the Operating Partnership
for 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
Cash distributions to noncontrolling interests
Cash distributions declared ($3.6434 per common
share, none of which represented a return of
capital for federal income tax purposes)
(569)
334
471
4
5
270,434
(3,159)
267,275
(25,276)
(25,845)
(43,593)
(14,950)
(43,593)
(14,950)
334
471
(34,320)
(34,320)
99
2
25,761
(4,333)
(46)
(248,287)
(136,066)
25,763
(384,399)
58,462
58,462
(478)
(478)
(279,377)
(279,377)
Balance at December 31, 2019
$ 221,932
74,672
$ 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
74,672
$ 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
for 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
Cash distributions to noncontrolling interests
Cash distributions declared ($4.9374 per common
share, none of which represented a return of
capital for federal income tax purposes)
(3,123)
1,006
1
8,743
16
95
(33)
—
25,271
(8,276)
(88)
(455,343)
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
25,271
(76,831)
(532,262)
12,477
12,477
(78,855)
(78,855)
(341,945)
(341,945)
Balance at December 31, 2020
$ 221,932
66,474
$ 716
$ 3,862,949
$ (124,049) $
(67,247) $ 1,015,462
$
26,032
$ 4,935,795
Net income
Other comprehensive income
Preferred dividends
DRSPP proceeds
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
Sale of interest in partially owned entity
Cash distributions to noncontrolling interests
11
738
108
2
32,581
(4,474)
(46)
(281,206)
12
818
449,754
(1,884)
447,870
20,489
(14,950)
(9,851)
(56,372)
20,489
(14,950)
738
(9,851)
32,583
(337,624)
818
336
(4,476)
(6,631)
336
(4,476)
(6,631)
30
31
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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
Issuance of special dividend paid primarily in
stock
Cash distributions declared ($6.2729 per common
share, none of which represented a return of
capital for federal income tax purposes)
1,974
123,529
(2,111)
2,111
123,529
$
480,632 $
414,758 $
291,487
(410,373)
(410,373)
Balance at December 31, 2021
$ 221,932
64,105
$ 672
$ 3,739,409
$ (126,160) $
(46,758) $ 975,781
$
13,377
$ 4,778,253
(1)
On January 18, 2022, we completed a reverse stock split whereby every 1.03060 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, 2018.
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 from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real
estate
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
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
(287,417)
(215,506)
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
Cash assumed from consolidation of real estate investment
Proceeds from sale or redemption of marketable securities
Purchases of marketable securities
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
Year Ended December 31,
2021
2020
2019
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
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
—
(70,315)
124,572
1,112,382
—
—
—
(5,239)
(128,682)
79,020
208,302
—
—
—
32,479
(7,869)
(360,953)
(607,844)
763,251
1,092,383
1,056,430
114,494
2,931
1,551
(6,701)
17,234
37,164
(20,561)
(8,727)
(10,117)
20,345
(66,387)
(1,727)
(33,241)
255,979
—
(88,872)
770,604
651,594
9,475
4,528
(10,000)
40,200
(95,695)
167,024
993,581
$
(152,791) $
(86,846) $
(262,591)
(302,486)
(458,140)
(252,986)
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32
33
Issuance of special dividend paid primarily in
stock
Cash distributions declared ($6.2729 per common
share, none of which represented a return of
capital for federal income tax purposes)
Balance at December 31, 2021
$ 221,932
64,105
$ 672
$ 3,739,409
$ (126,160) $
(46,758) $ 975,781
$
13,377
$ 4,778,253
(410,373)
(410,373)
(1)
On January 18, 2022, we completed a reverse stock split whereby every 1.03060 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, 2018.
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
1,974
123,529
(2,111)
2,111
123,529
Operating Activities
Net income
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 from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real
estate
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
Cash assumed from consolidation of real estate investment
Proceeds from sale or redemption of marketable securities
Purchases of marketable securities
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
Year Ended December 31,
2021
2020
2019
$
480,632 $
414,758 $
291,487
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
(287,417)
(215,506)
2,931
1,551
(6,701)
17,234
37,164
(20,561)
(8,727)
(10,117)
20,345
(66,387)
(1,727)
(33,241)
255,979
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
$
(152,791) $
(86,846) $
(262,591)
(302,486)
(458,140)
(252,986)
—
(88,872)
770,604
651,594
9,475
4,528
(10,000)
40,200
(95,695)
167,024
993,581
—
(70,315)
124,572
1,112,382
—
—
—
(5,239)
(128,682)
79,020
208,302
—
—
—
32,479
(7,869)
(360,953)
(607,844)
763,251
1,092,383
1,056,430
114,494
32
33
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Year Ended December 31,
2021
2020
2019
64,120
53,548
119,444
19,831
4,476
—
358
—
—
—
—
—
—
—
6,613
3,779
119,725
61,990
—
—
—
—
—
—
—
48,223
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
537,344
389,120
In December 2021, the Company declared a regular monthly distribution per share of $0.3108 ($0.3203 reflecting reverse
stock split noted in Note 1, "Organization and Basis of Presentation") that was paid in cash and a special distribution per share
of $2.4392 ($2.5138 reflecting reverse stock split noted in Note 1, "Organization and Basis of Presentation") that was paid
entirely in stock. These distributions were paid in January 2022. In December 2020, the Company declared a regular monthly
distribution per share of $0.3217 that was paid in cash and a special distribution per share of $1.7996 that was paid entirely in
stock. These distributions were paid in January 2021. In December 2019, the Company declared a quarterly distribution per
share of $0.9387. This distribution was paid in January 2020. These distribution amounts have been retroactively adjusted to
reflect the reverse stock split that was effectuated in January 2022.
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
2021
2020
2019
$
$
251,417 $
266,059 $
166,070
85,567
106,736
75,360
336,984 $
372,795 $
241,430
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2021
2020
2019
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
$
39,689 $
1,181,892 $
752,984
Consolidation of real estate investment
(375,044)
(1,186,828)
(230,076)
Removal of fully depreciated commercial real estate properties
66,169
19,577
Transfer of liabilities related to assets held for sale
Extinguishment of debt in connection with property dispositions
Proceeds from revolving credit facility and senior unsecured notes
1,488,000
1,495,000
1,310,000
Sale of interest in partially owned entity
Repayments of revolving credit facility and senior unsecured notes
(1,808,000)
(1,875,000)
(1,570,000)
Contribution to consolidated joint venture by noncontrolling interest
Proceeds from stock options exercised and DRSPP issuance
1,556
1,006
334
Distributions to noncontrolling interests
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 obligation related to secured borrowing
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net (decrease) increase in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
(341,403)
(528,483)
(384,399)
Share repurchase payable
(6,040)
(25,703)
(6,631)
336
—
(15,749)
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(12,652)
(18,142)
(27,495)
(478)
10,239
(25,845)
(14,729)
(271,075)
(293,996)
(306,386)
51,862
(2,990)
(13,745)
(434)
—
(4,752)
(70,036)
(833)
—
(3,495)
(21,162)
—
(1,285,371)
(1,479,301)
(528,650)
(35,811)
372,795
131,365
241,430
(37,683)
279,113
Cash, cash equivalents, and restricted cash at end of period
$
336,984 $
372,795 $
241,430
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
Assumption of mortgage loan
Issuance of special dividend paid primarily in stock
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
$
$
$
152,773 $
201,348 $
248,684
4,405 $
2,296 $
1,489
— $
8,744 $
27,586
—
9,468
60,000
121,418
—
7,580
9,851
66,837
510,000
—
—
8,372
140,855
—
119,497
122,796
—
—
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
—
391,664
471
—
—
34,498
—
—
1,000
6,056
34,320
395
—
—
—
—
391,664
—
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34
35
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2021
2020
2019
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
$
39,689 $
1,181,892 $
752,984
Consolidation of real estate investment
(375,044)
(1,186,828)
(230,076)
Removal of fully depreciated commercial real estate properties
Transfer of liabilities related to assets held for sale
Extinguishment of debt in connection with property dispositions
Proceeds from revolving credit facility and senior unsecured notes
1,488,000
1,495,000
1,310,000
Sale of interest in partially owned entity
Repayments of revolving credit facility and senior unsecured notes
(1,808,000)
(1,875,000)
(1,570,000)
Contribution to consolidated joint venture by noncontrolling interest
Proceeds from stock options exercised and DRSPP issuance
1,556
1,006
334
Distributions to noncontrolling interests
(341,403)
(528,483)
(384,399)
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,
2021
2020
2019
64,120
53,548
119,444
19,831
4,476
—
358
—
—
537,344
—
—
—
66,169
—
—
6,613
3,779
119,725
61,990
—
—
—
19,577
—
48,223
—
—
—
389,120
In December 2021, the Company declared a regular monthly distribution per share of $0.3108 ($0.3203 reflecting reverse
stock split noted in Note 1, "Organization and Basis of Presentation") that was paid in cash and a special distribution per share
of $2.4392 ($2.5138 reflecting reverse stock split noted in Note 1, "Organization and Basis of Presentation") that was paid
entirely in stock. These distributions were paid in January 2022. In December 2020, the Company declared a regular monthly
distribution per share of $0.3217 that was paid in cash and a special distribution per share of $1.7996 that was paid entirely in
stock. These distributions were paid in January 2021. In December 2019, the Company declared a quarterly distribution per
share of $0.9387. This distribution was paid in January 2020. These distribution amounts have been retroactively adjusted to
reflect the reverse stock split that was effectuated in January 2022.
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
2021
2020
2019
$
$
251,417 $
266,059 $
166,070
85,567
106,736
75,360
336,984 $
372,795 $
241,430
The accompanying notes are an integral part of these consolidated financial statements.
Cash, cash equivalents, and restricted cash at end of period
$
336,984 $
372,795 $
241,430
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 obligation related to secured borrowing
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net (decrease) increase 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
Assumption of mortgage loan
Issuance of special dividend paid primarily in stock
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
(6,040)
(25,703)
(6,631)
336
—
(15,749)
51,862
(2,990)
(13,745)
(434)
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(12,652)
—
(4,752)
(70,036)
(833)
(18,142)
(27,495)
(478)
10,239
(25,845)
(14,729)
—
(3,495)
(21,162)
—
(271,075)
(293,996)
(306,386)
(1,285,371)
(1,479,301)
(528,650)
(35,811)
372,795
131,365
241,430
(37,683)
279,113
152,773 $
201,348 $
248,684
4,405 $
2,296 $
1,489
$
$
$
27,586
—
9,468
60,000
121,418
—
7,580
9,851
66,837
510,000
—
—
8,372
140,855
—
119,497
122,796
—
—
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
—
391,664
471
—
—
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
—
391,664
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
— $
8,744 $
34
35
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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, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Capital
SLGOP partners' capital:
December 31, 2021 and 2020
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both
SL Green partners' capital (677 and 703 general partner common units, and 63,428 and
65,771 limited partner common units outstanding at December 31, 2021 and 2020,
respectively)
Accumulated other comprehensive loss
Total SLGOP partners' capital
Noncontrolling interests in other partnerships
Total capital
Total liabilities and capital
221,932
221,932
4,589,702
(46,758)
4,764,876
13,377
4,778,253
4,755,078
(67,247)
4,909,763
26,032
4,935,795
11,707,567
$
11,066,629 $
(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: $193.4 million and $41.2
million of land, $336.9 million and $57.9 million of building and improvements, $— million and $2.0 million of building and leasehold improvements, $15.4
million and $37.8 million of right of use assets, $11.7 million and $10.3 million of accumulated depreciation, $574.4 million and $289.5 million of other
assets included in other line items, $418.9 million and $94.0 million of real estate debt, net, $0.8 million and $0.7 million of accrued interest payable, $15.3
million and $29.9 million of lease liabilities, and $145.2 million and $56.6 million of other liabilities included in other line items as of December 31, 2021 and
December 31, 2020, 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
$5,057 and $11,232 and allowances of $6,630 and $13,213 in 2021 and 2020, 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 (3,782 and 3,939 limited partner common units
outstanding at December 31, 2021 and 2020, respectively)
Preferred units
$
1,350,701 $
3,671,402
1,645,081
—
983,723
7,650,907
(1,896,199)
5,754,708
140,855
251,417
85,567
34,752
47,616
29,408
248,313
1,088,723
2,997,934
124,495
262,841
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
$
$
11,066,629 $
11,707,567
1,394,386 $
381,334
1,242,002
899,308
12,698
195,390
157,571
107,275
102,914
851,370
187,372
52,309
64,120
100,000
5,748,049
344,252
196,075
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
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37
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, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Capital
SLGOP partners' capital:
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both
December 31, 2021 and 2020
SL Green partners' capital (677 and 703 general partner common units, and 63,428 and
65,771 limited partner common units outstanding at December 31, 2021 and 2020,
respectively)
Accumulated other comprehensive loss
Total SLGOP partners' capital
Noncontrolling interests in other partnerships
Total capital
Total liabilities and capital
221,932
221,932
4,589,702
(46,758)
4,764,876
13,377
4,778,253
$
11,066,629 $
4,755,078
(67,247)
4,909,763
26,032
4,935,795
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: $193.4 million and $41.2
million of land, $336.9 million and $57.9 million of building and improvements, $— million and $2.0 million of building and leasehold improvements, $15.4
million and $37.8 million of right of use assets, $11.7 million and $10.3 million of accumulated depreciation, $574.4 million and $289.5 million of other
assets included in other line items, $418.9 million and $94.0 million of real estate debt, net, $0.8 million and $0.7 million of accrued interest payable, $15.3
million and $29.9 million of lease liabilities, and $145.2 million and $56.6 million of other liabilities included in other line items as of December 31, 2021 and
December 31, 2020, 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
$5,057 and $11,232 and allowances of $6,630 and $13,213 in 2021 and 2020, respectively
Investments in unconsolidated joint ventures
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
Limited partner interests in SLGOP (3,782 and 3,939 limited partner common units
outstanding at December 31, 2021 and 2020, respectively)
Preferred units
$
1,350,701 $
3,671,402
1,645,081
—
983,723
7,650,907
(1,896,199)
5,754,708
140,855
251,417
85,567
34,752
47,616
29,408
248,313
1,088,723
2,997,934
124,495
262,841
1,394,386 $
381,334
1,242,002
899,308
12,698
195,390
157,571
107,275
102,914
851,370
187,372
52,309
64,120
100,000
5,748,049
344,252
196,075
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
11,066,629 $
11,707,567
$
$
36
37
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SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
Net income
Other comprehensive loss:
Increase (decrease) in unrealized value of derivative instruments, including
SLGOP's share of joint venture derivative instruments
Increase (decrease) in unrealized value of marketable securities
Other comprehensive income (loss)
Comprehensive income
Net loss (income) attributable to noncontrolling interests
Other comprehensive (income) loss attributable to noncontrolling interests
Year Ended December 31,
2021
2020
2019
$
480,632 $
414,758 $
291,487
21,427
104
21,531
502,163
1,884
(1,042)
(39,743)
(1,318)
(41,061)
373,697
(14,940)
2,299
(47,118)
1,249
(45,869)
245,618
3,159
2,276
Comprehensive income attributable to SLGOP
$
503,005 $
361,056 $
251,053
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,
2021
2020
2019
$
678,176 $
804,423 $
1,052,744
1,238,995
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Operating expenses, including related party expenses of $12,377 in 2021,
$12,643 in 2020 and $18,106 in 2019
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 from unconsolidated joint ventures
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real
estate
Purchase price and other fair value adjustment
Gain on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Net loss (income) 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:
80,340
85,475
843,991
167,153
152,835
26,554
70,891
11,424
216,869
2,931
3,773
94,912
747,342
(55,402)
(32,757)
210,070
287,417
(23,794)
(1,551)
480,632
1,884
(7,305)
475,211
(14,950)
120,163
128,158
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)
$
$
$
460,261 $
376,121 $
6.57 $
6.50 $
5.03 $
5.01 $
Basic weighted average common units outstanding
Diluted weighted average common units and common unit equivalents
outstanding
69,727
70,769
74,493
75,078
The accompanying notes are an integral part of these consolidated financial statements.
983,557
195,590
59,848
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)
268,785
3.29
3.28
81,332
81,865
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39
SL Green Operating Partnership, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
Year Ended December 31,
2021
2020
2019
$
678,176 $
804,423 $
Net income
Other comprehensive loss:
Increase (decrease) in unrealized value of derivative instruments, including
SLGOP's share of joint venture derivative instruments
Increase (decrease) in unrealized value of marketable securities
1,052,744
1,238,995
Other comprehensive income (loss)
Comprehensive income
Net loss (income) attributable to noncontrolling interests
Other comprehensive (income) loss attributable to noncontrolling interests
Year Ended December 31,
2020
2019
2021
$
480,632 $
414,758 $
291,487
21,427
104
21,531
502,163
1,884
(1,042)
(39,743)
(1,318)
(41,061)
373,697
(14,940)
2,299
(47,118)
1,249
(45,869)
245,618
3,159
2,276
Comprehensive income attributable to SLGOP
$
503,005 $
361,056 $
251,053
The accompanying notes are an integral part of these consolidated financial statements.
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Real estate taxes
Operating lease rent
Operating expenses, including related party expenses of $12,377 in 2021,
$12,643 in 2020 and $18,106 in 2019
Loan loss and other investment reserves, net of recoveries
Interest expense, net of interest income
Amortization of deferred financing costs
Depreciation and amortization
Transaction related costs
Marketing, general and administrative
Total expenses
Equity in net loss from unconsolidated joint ventures
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real
Net loss (income) attributable to noncontrolling interests in other partnerships
estate
Purchase price and other fair value adjustment
Gain on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net income
Preferred unit distributions
Net income attributable to SLGOP
Perpetual preferred stock dividends
Basic earnings per unit:
Diluted earnings per unit:
80,340
85,475
843,991
167,153
152,835
26,554
70,891
11,424
216,869
2,931
3,773
94,912
747,342
(55,402)
(32,757)
210,070
287,417
(23,794)
(1,551)
480,632
1,884
(7,305)
475,211
(14,950)
120,163
128,158
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)
Net income attributable to SLGOP common unitholders
460,261 $
376,121 $
$
$
$
6.57 $
6.50 $
5.03 $
5.01 $
Basic weighted average common units outstanding
Diluted weighted average common units and common unit equivalents
outstanding
69,727
70,769
74,493
75,078
The accompanying notes are an integral part of these consolidated financial statements.
983,557
195,590
59,848
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)
268,785
3.29
3.28
81,332
81,865
38
39
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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 Cash Flows
(in thousands)
Balance at December 31, 2018
Net income
Acquisition of subsidiary interest from noncontrolling interest
Other comprehensive loss
Preferred distributions
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
Contributions to consolidated joint venture interests
Cash distributions to noncontrolling interests
Cash distributions declared ($3.6434 per common unit, none of which
represented a return of capital for federal income tax purposes)
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units (1)
Common
Unitholders
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling
Interests
Total
$ 221,932
78,897
$ 5,664,481
$
15,108
$
46,334
$ 5,947,855
(43,593)
270,434
(569)
(14,950)
334
471
(34,320)
4
5
99
25,763
(4,333)
(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)
Year Ended December 31,
2021
2020
2019
$
480,632 $
414,758 $
291,487
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real
estate
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
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
(287,417)
(215,506)
(279,377)
(279,377)
Loss on early extinguishment of debt
Balance at December 31, 2019
$ 221,932
74,672
$ 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 distributions
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
Cash distributions to noncontrolling interests
Cash distributions declared ($4.9374 per common unit, none of which
represented a return of capital for federal income tax purposes)
Balance at December 31, 2020
Net income
Other comprehensive income
Preferred distributions
DRSPP proceeds
Reallocation of noncontrolling interest 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
Sale of interest in partially owned entity
Cash distributions to noncontrolling interests
$ 221,932
74,672
$ 5,208,684
$
(28,485) $
75,883
$ 5,478,014
(38,762)
371,055
(3,123)
(14,950)
1,006
8,744
32,598
16
95
(33)
25,271
(8,276)
(532,262)
14,940
385,995
1,587
(1,536)
(38,762)
(14,950)
1,006
8,744
32,598
25,271
(532,262)
12,477
12,477
(78,855)
(78,855)
$ 221,932
66,474
$ 4,755,078
$
(67,247) $
26,032
$ 4,935,795
(341,945)
(341,945)
20,489
449,754
(14,950)
738
(9,851)
11
108
32,583
(4,474)
(337,624)
12
818
(1,884)
447,870
20,489
(14,950)
738
(9,851)
32,583
(337,624)
818
336
(4,476)
(6,631)
123,529
(410,373)
336
(4,476)
(6,631)
Issuance of special distribution paid primarily in units
1,974
123,529
Cash distributions declared ($6.2729 per common unit, none of which
represented a return of capital for federal income tax purposes)
(410,373)
Balance at December 31, 2021
$ 221,932
64,105
$ 4,589,702
$
(46,758) $
13,377
$ 4,778,253
(1)
On January 18, 2022, we completed a reverse stock split whereby every 1.03060 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, 2018.
70310_10K_r2.indd 40
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40
41
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
35,298
—
(7,582)
11,984
15,178
(17,074)
1,451
(20,900)
(26,137)
132,171
20,657
(11,369)
554,236
—
(70,315)
124,572
1,112,382
—
—
—
(5,239)
(128,682)
79,020
208,302
—
—
—
32,479
(7,869)
(360,953)
(607,844)
763,251
1,092,383
1,056,430
114,494
2,931
1,551
(6,701)
17,234
37,164
(20,561)
(8,727)
(10,117)
20,345
(66,387)
(1,727)
(33,241)
255,979
—
(88,872)
770,604
651,594
9,475
4,528
(10,000)
40,200
(95,695)
167,024
993,581
$
(152,791) $
(86,846) $
(262,591)
(302,486)
(458,140)
(252,986)
Changes in operating assets and liabilities:
Deferred rents receivable
Non-cash lease expense
Other non-cash adjustments
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
Cash assumed from consolidation of real estate investment
Proceeds from sale or redemption of marketable securities
Purchases of marketable securities
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
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 Cash Flows
(in thousands)
Balance at December 31, 2019
$ 221,932
74,672
$ 5,247,868
$
(28,485) $
75,883
$ 5,517,198
$ 221,932
74,672
$ 5,208,684
$
(28,485) $
75,883
$ 5,478,014
Acquisition of subsidiary interest from noncontrolling interest
Balance at December 31, 2018
Net income
Other comprehensive loss
Preferred distributions
DRSPP proceeds
Conversion of common units
withholdings
Repurchases of common units
Reallocation of noncontrolling interests in the operating partnership
Deferred compensation plan and stock awards, net of forfeitures and tax
Contributions to consolidated joint venture interests
Cash distributions to noncontrolling interests
Cash distributions declared ($3.6434 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 distributions
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
Cash distributions to noncontrolling interests
Cash distributions declared ($4.9374 per common unit, none of which
represented a return of capital for federal income tax purposes)
Balance at December 31, 2020
Net income
Other comprehensive income
Preferred distributions
DRSPP proceeds
Reallocation of noncontrolling interest 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
Sale of interest in partially owned entity
Cash distributions to noncontrolling interests
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units (1)
Common
Unitholders
Accumulated
Other
Comprehensive
(Loss) Income
$ 221,932
78,897
$ 5,664,481
$
15,108
$
46,334
$ 5,947,855
Noncontrolling
Interests
Total
(3,159)
267,275
(25,276)
(25,845)
(43,593)
99
25,763
(4,333)
(384,399)
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
(341,945)
449,754
(14,950)
738
(9,851)
4
5
16
95
11
(33)
25,271
(8,276)
(532,262)
108
32,583
(4,474)
(337,624)
12
818
(43,593)
(14,950)
334
471
(34,320)
25,763
(384,399)
58,462
58,462
(478)
(478)
(279,377)
(39,184)
14,940
385,995
1,587
(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)
(1,884)
447,870
20,489
(14,950)
738
(9,851)
32,583
(337,624)
818
336
(4,476)
(6,631)
123,529
(410,373)
336
(4,476)
(6,631)
(38,762)
20,489
$ 221,932
66,474
$ 4,755,078
$
(67,247) $
26,032
$ 4,935,795
Issuance of special distribution paid primarily in units
1,974
123,529
Cash distributions declared ($6.2729 per common unit, none of which
represented a return of capital for federal income tax purposes)
(410,373)
Balance at December 31, 2021
$ 221,932
64,105
$ 4,589,702
$
(46,758) $
13,377
$ 4,778,253
(1)
On January 18, 2022, we completed a reverse stock split whereby every 1.03060 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, 2018.
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Equity in net loss from unconsolidated joint ventures
Distributions of cumulative earnings from unconsolidated joint ventures
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real
estate
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
Cash assumed from consolidation of real estate investment
Proceeds from sale or redemption of marketable securities
Purchases of marketable securities
Other investments
Origination of debt and preferred equity investments
Repayments or redemption of debt and preferred equity investments
Net cash provided by investing activities
Year Ended December 31,
2021
2020
2019
$
480,632 $
414,758 $
291,487
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
(287,417)
(215,506)
2,931
1,551
(6,701)
17,234
37,164
(20,561)
(8,727)
(10,117)
20,345
(66,387)
(1,727)
(33,241)
255,979
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
$
(152,791) $
(86,846) $
(262,591)
(302,486)
(458,140)
(252,986)
—
(88,872)
770,604
651,594
9,475
4,528
(10,000)
40,200
(95,695)
167,024
993,581
—
(70,315)
124,572
1,112,382
—
—
—
(5,239)
(128,682)
79,020
208,302
—
—
—
32,479
(7,869)
(360,953)
(607,844)
763,251
1,092,383
1,056,430
114,494
40
41
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Year Ended December 31,
2021
2020
2019
—
391,664
64,120
53,548
119,444
19,831
4,476
—
358
—
—
—
—
—
—
—
6,613
3,779
119,725
61,990
—
—
—
—
—
—
—
—
48,223
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
537,344
389,120
In December 2021, the Operating Partnership declared a regular monthly distribution per unit of $0.3108 ($0.3203
reflecting reverse stock split noted in Note 1, "Organization and Basis of Presentation") that was paid in cash and a special
distribution per unit of $2.4392 ($2.5138 reflecting reverse stock split noted in Note 1, "Organization and Basis of
Presentation") that was paid entirely in units. These distributions were paid in January 2022. In December 2020, the Company
declared a regular monthly distribution per unit of $0.3217 that was paid in cash and a special distribution per unit of $1.7996
that was paid entirely in units. These distributions were paid in January 2021. In December 2019, the Company declared a
quarterly distribution per unit of $0.9387. This distribution was paid in January 2020. These distribution amounts have been
retroactively adjusted to reflect the reverse stock split that was effectuated in January 2022.
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
2021
2020
2019
$
$
251,417 $
266,059 $
166,070
85,567
106,736
75,360
336,984 $
372,795 $
241,430
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2021
2020
2019
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
$
39,689 $
1,181,892 $
752,984
Extinguishment of debt in connection with property dispositions
(375,044)
(1,186,828)
(230,076)
Consolidation of real estate investment
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Proceeds from revolving credit facility and senior unsecured notes
1,488,000
1,495,000
1,310,000
Removal of fully depreciated commercial real estate properties
66,169
19,577
Repayments of revolving credit facility and senior unsecured notes
(1,808,000)
(1,875,000)
(1,570,000)
Sale of interest in partially owned entity
Payment of debt extinguishment costs
Proceeds from stock options exercised and DRSPP issuance
—
1,556
—
1,006
—
334
Contribution to consolidated joint venture by noncontrolling interest
Distributions to noncontrolling interests
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 obligation related to secured borrowing
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net (decrease) increase in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
(341,403)
(528,483)
(384,399)
Share repurchase payable
(6,040)
(25,703)
(6,631)
336
—
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(18,142)
(27,495)
(478)
10,239
(25,845)
(286,824)
(306,648)
(321,115)
51,862
(2,990)
(13,745)
(434)
—
(4,752)
(70,036)
(833)
—
(3,495)
(21,162)
—
(1,285,371)
(1,479,301)
(528,650)
(35,811)
372,795
131,365
241,430
(37,683)
279,113
Cash, cash equivalents, and restricted cash at end of period
$
336,984 $
372,795 $
241,430
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
Assumption of mortgage loan
Issuance of common units relating to the real estate acquisition
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
$
$
$
152,773 $
201,348 $
248,684
4,405 $
2,296 $
1,489
— $
8,744 $
27,586
—
9,468
60,000
121,418
—
7,580
9,851
66,837
510,000
—
—
8,372
140,855
—
119,497
122,796
—
—
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
471
—
—
34,498
—
—
1,000
6,056
34,320
395
—
—
—
—
391,664
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42
43
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2021
2020
2019
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
$
39,689 $
1,181,892 $
752,984
Extinguishment of debt in connection with property dispositions
(375,044)
(1,186,828)
(230,076)
Consolidation of real estate investment
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Proceeds from revolving credit facility and senior unsecured notes
1,488,000
1,495,000
1,310,000
Removal of fully depreciated commercial real estate properties
Repayments of revolving credit facility and senior unsecured notes
(1,808,000)
(1,875,000)
(1,570,000)
Sale of interest in partially owned entity
(341,403)
(528,483)
(384,399)
Share repurchase payable
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
Contribution to consolidated joint venture by noncontrolling interest
Distributions to noncontrolling interests
Year Ended December 31,
2021
2020
2019
—
391,664
64,120
53,548
119,444
19,831
4,476
—
358
—
—
537,344
—
—
—
66,169
—
—
6,613
3,779
119,725
61,990
—
—
—
—
19,577
—
48,223
—
—
—
389,120
In December 2021, the Operating Partnership declared a regular monthly distribution per unit of $0.3108 ($0.3203
reflecting reverse stock split noted in Note 1, "Organization and Basis of Presentation") that was paid in cash and a special
distribution per unit of $2.4392 ($2.5138 reflecting reverse stock split noted in Note 1, "Organization and Basis of
Presentation") that was paid entirely in units. These distributions were paid in January 2022. In December 2020, the Company
declared a regular monthly distribution per unit of $0.3217 that was paid in cash and a special distribution per unit of $1.7996
that was paid entirely in units. These distributions were paid in January 2021. In December 2019, the Company declared a
quarterly distribution per unit of $0.9387. This distribution was paid in January 2020. These distribution amounts have been
retroactively adjusted to reflect the reverse stock split that was effectuated in January 2022.
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
2021
2020
2019
$
$
251,417 $
266,059 $
166,070
85,567
106,736
75,360
336,984 $
372,795 $
241,430
The accompanying notes are an integral part of these consolidated financial statements.
Cash, cash equivalents, and restricted cash at end of period
$
336,984 $
372,795 $
241,430
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 obligation related to secured borrowing
Tax withholdings related to restricted share awards
Deferred loan costs
Principal payments of on financing lease liabilities
Net cash used in financing activities
Net (decrease) increase 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
Assumption of mortgage loan
Issuance of common units relating to the real estate acquisition
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
—
1,556
(6,040)
(25,703)
(6,631)
336
—
51,862
(2,990)
(13,745)
(434)
—
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)
—
(286,824)
(306,648)
(321,115)
(1,285,371)
(1,479,301)
(528,650)
(35,811)
372,795
131,365
241,430
(37,683)
279,113
152,773 $
201,348 $
248,684
4,405 $
2,296 $
1,489
$
$
$
27,586
—
9,468
60,000
121,418
—
7,580
9,851
66,837
510,000
—
—
8,372
140,855
—
119,497
122,796
—
—
—
1,665
32,598
854,437
5,593
250,000
100,000
9,014
—
471
—
—
—
—
34,498
1,000
6,056
34,320
395
—
—
—
—
391,664
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Conversion of units in the Operating Partnership
— $
8,744 $
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, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
1. Organization and Basis of Presentation
Partnership Agreement
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 S.L.
Green Management Corp, or 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 and S.L. Green Management Corp., respectively, which are 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, 2021, noncontrolling investors
held, in the aggregate, a 5.57% limited partnership interest in the Operating Partnership, inclusive of retroactive adjustments to
reflect the reverse stock split. 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."
On December 31, 2021, 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
Buildings
Approximate
Square Feet
(unaudited)
Number of
Buildings
Approximate
Square Feet
(unaudited)
Number of
Buildings
Approximate
Square Feet
(unaudited)
Weighted
Average
Occupancy(1)
(unaudited)
Location
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Fee Interest
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
12
2
8
1
23
7
30
1
31
8,180,345
17,888
2,538,284
7,684
10,744,201
862,800
11,607,001
10
12,004,183
301,996
3,275,508
—
9
3
—
22
—
22
15,581,687
45
26,325,888
—
7
862,800
15,581,687
52
27,188,688
22
11
11
1
20,184,528
319,884
5,813,792
7,684
82,250
6
445,934
7
528,184
11,689,251
28
16,027,621
59
27,716,872
92.1 %
91.2 %
N/A
N/A
92.0 %
78.9 %
91.5 %
97.0 %
91.6 %
(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. Properties
under construction are not included in the calculation of weighted average occupancy.
As of December 31, 2021, 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
$10.1 million 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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44
45
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 Long Term Incentive Plan
("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 2, 2021, our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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.
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
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
1. Organization and Basis of Presentation
Partnership Agreement
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 S.L.
Green Management Corp, or 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 and S.L. Green Management Corp., respectively, which are 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, 2021, noncontrolling investors
held, in the aggregate, a 5.57% limited partnership interest in the Operating Partnership, inclusive of retroactive adjustments to
reflect the reverse stock split. 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."
On December 31, 2021, 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
Buildings
Approximate
Square Feet
(unaudited)
Number of
Buildings
Approximate
Square Feet
(unaudited)
Number of
Buildings
Approximate
Square Feet
(unaudited)
Weighted
Average
Occupancy(1)
(unaudited)
Location
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Fee Interest
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
Total portfolio
12
2
8
1
23
7
30
1
31
8,180,345
17,888
2,538,284
7,684
10,744,201
862,800
11,607,001
10
12,004,183
301,996
3,275,508
—
—
9
3
—
22
—
22
22
11
11
1
7
20,184,528
319,884
5,813,792
7,684
862,800
15,581,687
45
26,325,888
15,581,687
52
27,188,688
82,250
6
445,934
7
528,184
11,689,251
28
16,027,621
59
27,716,872
92.1 %
91.2 %
N/A
N/A
92.0 %
78.9 %
91.5 %
97.0 %
91.6 %
(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. Properties
under construction are not included in the calculation of weighted average occupancy.
As of December 31, 2021, 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
$10.1 million 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.
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 Long Term Incentive Plan
("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 2, 2021, our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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.
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
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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.
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.
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 15 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 15 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, 2021, the weighted
average amortization period for above-market leases, below-market leases, and in-place lease costs is 5.1 years, 14.3 years, and
3.8 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. 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
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
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
40 years
shorter of remaining life of the building or useful life
lesser of 40 years or remaining term of the lease
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
842.
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 $187.3 million, $277.5
million, and $233.5 million for the years ended December 31, 2021, 2020 and 2019, 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 Accounting Standards Codification, or 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.
For the year ended December 31, 2021, we recognized a reduction of rental revenue of ($4.2 million) for the amortization
of aggregate above-market leases in excess of below-market leases resulting from the allocation of the purchase price of the
applicable properties. For the years ended December 31, 2020 and 2019, we recognized $5.9 million and $4.5 million,
respectively, of rental revenue for the amortization of aggregate below-market leases in excess of above-market leases.
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, 2021 and 2020 (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,
2021
2020
$
$
$
$
199,722 $
(182,643)
17,079 $
212,767 $
(210,262)
2,505 $
215,673
(190,523)
25,150
241,409
(230,479)
10,930
(1) As of December 31, 2021, $1.8 million of 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, 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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.
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.
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 15 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 15 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, 2021, the weighted
average amortization period for above-market leases, below-market leases, and in-place lease costs is 5.1 years, 14.3 years, and
3.8 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. 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
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
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
842.
Depreciation expense (including amortization of right of use assets - financing leases) totaled $187.3 million, $277.5
million, and $233.5 million for the years ended December 31, 2021, 2020 and 2019, 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 Accounting Standards Codification, or 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.
For the year ended December 31, 2021, we recognized a reduction of rental revenue of ($4.2 million) for the amortization
of aggregate above-market leases in excess of below-market leases resulting from the allocation of the purchase price of the
applicable properties. For the years ended December 31, 2020 and 2019, we recognized $5.9 million and $4.5 million,
respectively, of rental revenue for the amortization of aggregate below-market leases in excess of above-market leases.
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, 2021 and 2020 (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,
2021
2020
$
$
$
$
199,722 $
(182,643)
17,079 $
212,767 $
(210,262)
2,505 $
215,673
(190,523)
25,150
241,409
(230,479)
10,930
(1) As of December 31, 2021, $1.8 million of 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, 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
The estimated annual amortization of acquired above-market leases, net of acquired (below-market) leases (a component
We held equity marketable securities as of December 31, 2021 and no equity marketable securities as of December 31,
of rental revenue), for each of the five succeeding years is as follows (in thousands):
2020. We recognized $0.6 million of unrealized gains for the year ended December 31, 2021.
2022
2023
2024
2025
2026
$
$
$
$
$
505
476
56
234
205
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):
2022
2023
2024
2025
2026
Cash and Cash Equivalents
$
$
$
$
$
5,575
5,409
3,544
2,027
1,850
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 debt security as held-to-maturity, available-for-sale, or trading. As of December 31, 2021,
we did not have any debt securities designated as held-to-maturity or trading. We account for our available-for-sale securities at
fair value pursuant to 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. We account for our equity marketable securities at fair value pursuant to ASC 820-10, with the net
unrealized gains or losses reported in net income.
As of December 31, 2021 and 2020, we held the following marketable securities (in thousands):
Commercial mortgage-backed securities
Total marketable securities available-for-sale
Equity marketable securities
Total investment in marketable securities
December 31,
2021
2020
$
$
$
$
24,146 $
24,146 $
10,606 $
34,752 $
28,570
28,570
—
28,570
The cost basis of the commercial mortgage-backed securities was $23.0 million and $27.5 million as of December 31,
2021 and 2020, respectively. These securities mature at various times through 2035. All securities were in an unrealized gain
position as of December 31, 2021 except for one security, which had an unrealized loss of $0.6 million and a fair market value
of $7.2 million as of December 31, 2021, and an unrealized loss of $0.7 million and a fair value of $7.0 million as of
December 31, 2020. This marketable security was in in a continuous unrealized loss position for more than 12 months as of
December 31, 2021 and less than 12 months as of December 31, 2020. We do not intend to sell these securities and it is more
likely than not that we will not be required to sell the investment before the recovery of their amortized cost basis.
During the year ended December 31, 2021, we received aggregate net proceeds of $4.5 million from the repayment of
one debt marketable security. During the years ended 2020 and 2019, we did not dispose of any debt marketable securities. We
did not dispose of any equity marketable securities during the year ended December 31, 2021.
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, 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 as of December 31, 2021.
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
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, 2021, 2020 and 2019, $6.2 million, $5.4 million,
and $6.3 million of their compensation, respectively, was capitalized and is amortized over an estimated average lease term of
preferred equity investments.
Deferred Lease Costs
seven 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.
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49
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
The estimated annual amortization of acquired above-market leases, net of acquired (below-market) leases (a component
We held equity marketable securities as of December 31, 2021 and no equity marketable securities as of December 31,
of rental revenue), for each of the five succeeding years is as follows (in thousands):
2020. We recognized $0.6 million of unrealized gains for the year ended December 31, 2021.
2022
2023
2024
2025
2026
2022
2023
2024
2025
2026
$
$
$
$
$
$
$
$
$
$
505
476
56
234
205
5,575
5,409
3,544
2,027
1,850
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 debt security as held-to-maturity, available-for-sale, or trading. As of December 31, 2021,
we did not have any debt securities designated as held-to-maturity or trading. We account for our available-for-sale securities at
fair value pursuant to 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. We account for our equity marketable securities at fair value pursuant to ASC 820-10, with the net
unrealized gains or losses reported in net income.
As of December 31, 2021 and 2020, we held the following marketable securities (in thousands):
Commercial mortgage-backed securities
Total marketable securities available-for-sale
Equity marketable securities
Total investment in marketable securities
December 31,
2021
2020
$
$
$
$
24,146 $
24,146 $
10,606 $
34,752 $
28,570
28,570
—
28,570
The cost basis of the commercial mortgage-backed securities was $23.0 million and $27.5 million as of December 31,
2021 and 2020, respectively. These securities mature at various times through 2035. All securities were in an unrealized gain
position as of December 31, 2021 except for one security, which had an unrealized loss of $0.6 million and a fair market value
of $7.2 million as of December 31, 2021, and an unrealized loss of $0.7 million and a fair value of $7.0 million as of
December 31, 2020. This marketable security was in in a continuous unrealized loss position for more than 12 months as of
December 31, 2021 and less than 12 months as of December 31, 2020. We do not intend to sell these securities and it is more
likely than not that we will not be required to sell the investment before the recovery of their amortized cost basis.
During the year ended December 31, 2021, we received aggregate net proceeds of $4.5 million from the repayment of
one debt marketable security. During the years ended 2020 and 2019, we did not dispose of any debt marketable securities. We
did not dispose of any equity marketable securities during the year ended December 31, 2021.
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, 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 as of December 31, 2021.
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, 2021, 2020 and 2019, $6.2 million, $5.4 million,
and $6.3 million of their compensation, respectively, was capitalized and is amortized over an estimated average lease term of
seven 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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
recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the
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
or the tenant are 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.
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 have a controlling financial interest in the entity
owning the real estate, a contract exists with a third party and that third party has control of the assets acquired.
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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
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.
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.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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
or the tenant are 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.
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 have a controlling financial interest in the entity
owning 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 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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 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. Accrued interest
receivables that are written off are recognized as an expense in 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
to shares that vested during the period.
Underwriting commissions and costs incurred in connection with our stock offerings are reflected as a reduction of
Awards can also be made in the form of a separate series of units of limited partnership interest in the Operating
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
Company's board of directors may determine, including continued employment or service, computation of financial metrics
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.
and/or achievement of pre-established performance goals and objectives.
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, 2021, 2020 and 2019, we recorded Federal, state and local tax provisions of $2.8
million, $1.2 million, and $1.5 million, respectively. For the year ended December 31, 2021, the Company paid distributions on
its common stock of $8.09 per share which represented $0.50 per share of ordinary income and $5.92 per share of capital gains.
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. 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 and January 2022.
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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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."
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
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
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.
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.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Rent Expense
leases on the consolidated balance sheets.
Underwriting Commissions and Costs
additional paid-in-capital.
Transaction Costs
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 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. Accrued interest
receivables that are written off are recognized as an expense in 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
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, 2021, 2020 and 2019, we recorded Federal, state and local tax provisions of $2.8
million, $1.2 million, and $1.5 million, respectively. For the year ended December 31, 2021, the Company paid distributions on
its common stock of $8.09 per share which represented $0.50 per share of ordinary income and $5.92 per share of capital gains.
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. 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 and January 2022.
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.
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."
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.
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.
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.
52
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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 2022 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 2022.
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 that 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, principally in Manhattan. Our tenants operate in various industries.
Other than one tenant, Viacom CBS Inc., which accounted for 6.3% of our share of annualized cash rent as of December 31,
2021, no other tenant in our portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of
joint venture annualized cash rent, as of December 31, 2021.
For the years ended December 31, 2021, 2020, and 2019, 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:
2021
Property
2020
Property
10.8% 11 Madison Avenue
8.2% 1185 Avenue of the Americas
8.3% 420 Lexington Avenue
7.5% 11 Madison Avenue
8.1% 1185 Avenue of the Americas
6.9% 420 Lexington Avenue
1185 Avenue of the Americas
8.0% 1515 Broadway
6.6% 1515 Broadway
6.7% 220 East 42nd Street
5.9% One Madison Avenue
5.3% 280 Park Ave
5.4% 220 East 42nd Street
Property
11 Madison Avenue
420 Lexington Avenue
1515 Broadway
280 Park Avenue
919 Third Avenue
485 Lexington Avenue
555 West 57th Street
5.3%
5.2%
2019
7.6%
7.4%
6.6%
6.1%
6.0%
5.5%
As of December 31, 2021, 62.8% of our work force is covered by five collective bargaining agreements. None of these
agreements expire before December 31, 2022. See Note 19, "Benefits Plans."
Reclassification
Accounting Standards Updates
Certain prior year balances have been reclassified to conform to our current year presentation.
In July 2021, the FASB issued ASU No. 2021-05 Leases (Topic 842) Lessors - Certain Leases with Variable Lease
Payments. ASU 2021-05 amends the lease classification requirements for lessors when classifying and accounting for a lease
with variable lease payments that do not depend on a reference rate index or a rate. The update provides criteria, that if met, the
lease would be classified and accounted for as an operating lease. ASU 2021-05 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
2021-05 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 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 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 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.
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55
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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.
portfolio are located in the New York metropolitan area, principally in Manhattan. Our tenants operate in various industries.
Other than one tenant, Viacom CBS Inc., which accounted for 6.3% of our share of annualized cash rent as of December 31,
2021, no other tenant in our portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of
joint venture annualized cash rent, as of December 31, 2021.
We may employ swaps, forwards or purchased options to hedge qualifying forecasted transactions. Gains and losses
For the years ended December 31, 2021, 2020, and 2019, the following properties contributed more than 5.0% of our
related to these transactions are deferred and recognized in net income as interest expense in the same period or periods that the
annualized cash rent from office properties, including our share of annualized cash rent from joint venture office properties:
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 2022 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 2022.
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 that tenant and the costs associated with re-tenanting a space. The properties in our real estate
Property
11 Madison Avenue
420 Lexington Avenue
1515 Broadway
2021
Property
2020
Property
10.8% 11 Madison Avenue
8.2% 1185 Avenue of the Americas
8.3% 420 Lexington Avenue
7.5% 11 Madison Avenue
8.1% 1185 Avenue of the Americas
6.9% 420 Lexington Avenue
1185 Avenue of the Americas
8.0% 1515 Broadway
6.6% 1515 Broadway
280 Park Avenue
6.7% 220 East 42nd Street
5.9% One Madison Avenue
919 Third Avenue
485 Lexington Avenue
555 West 57th Street
5.3% 280 Park Ave
5.4% 220 East 42nd Street
5.3%
5.2%
2019
7.6%
7.4%
6.6%
6.1%
6.0%
5.5%
As of December 31, 2021, 62.8% of our work force is covered by five collective bargaining agreements. None of these
agreements expire before December 31, 2022. See Note 19, "Benefits Plans."
Reclassification
Certain prior year balances have been reclassified to conform to our current year presentation.
Accounting Standards Updates
In July 2021, the FASB issued ASU No. 2021-05 Leases (Topic 842) Lessors - Certain Leases with Variable Lease
Payments. ASU 2021-05 amends the lease classification requirements for lessors when classifying and accounting for a lease
with variable lease payments that do not depend on a reference rate index or a rate. The update provides criteria, that if met, the
lease would be classified and accounted for as an operating lease. ASU 2021-05 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
2021-05 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 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 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 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
2020 Acquisitions
Property
762 Madison Avenue (1)
707 Eleventh Avenue
15 Beekman (2)
590 Fifth Avenue (3)
sponsor.
2019 Acquisitions
Property
106 Spring Street (1)
410 Tenth Avenue (2)
110 Greene Street (3)
(1)
(2)
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)
(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 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
The following table summarizes the properties acquired during the year ended December 31, 2019:
Acquisition Date
Property Type
April 2019
May 2019
May 2019
Fee Interest
Fee Interest
Fee Interest
Approximate
Square Feet
Acquisition
Price
(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.
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
2021 Acquisitions
The following table summarizes the properties acquired during the year ended December 31, 2021:
Property
885 Third Avenue (1)
461 Fifth Avenue (2)
1591-1597 Broadway (3)
690 Madison Avenue (4)
Acquisition Date
Property Type
January 2021
June 2021
September 2021
September 2021
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
625,000
$
200,000
7,684
7,848
387.9
28.0
121.0
72.2
(1)
(2)
(3)
(4)
In January 2021, pursuant to the partnership documents of our 885 Third Avenue investment, certain participating rights of the common member
expired. As a result, it was determined that this investment is a VIE in which we are the primary beneficiary, and the investment was consolidated in our
financial statements. Upon consolidating the entity, the assets and liabilities of the entity were recorded at fair value. Prior to January 2021, the
investment was accounted for under the equity method. See Note 6, "Investments in Unconsolidated Joint Ventures" and Note 16, "Fair Value
Measurements.
In April 2021, the Company exercised its option to acquire the fee interest in the property from the ground lessor and the Company acquired the fee
interest in June 2021. The Company held the leasehold interest in the property prior to exercising its option.
A third party has asserted ownership rights to the fee, which the Company is contesting.
In September 2021, the Company was the successful bidder for the fee interest in 690 Madison Avenue at the foreclosure of the asset. The property
previously served as collateral for a debt and preferred equity investment. We recorded the assets acquired and liabilities assumed at fair value. See Note
5, "Debt and Preferred Equity Investments" and Note 16, "Fair Value Measurements."
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57
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity
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 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.
2019 Acquisitions
The following table summarizes the properties acquired during the year ended December 31, 2019:
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
Acquisition
Price
(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.
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
2021 Acquisitions
Property
885 Third Avenue (1)
461 Fifth Avenue (2)
1591-1597 Broadway (3)
690 Madison Avenue (4)
The following table summarizes the properties acquired during the year ended December 31, 2021:
Acquisition Date
Property Type
January 2021
June 2021
September 2021
September 2021
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
625,000
$
200,000
7,684
7,848
387.9
28.0
121.0
72.2
(1)
In January 2021, pursuant to the partnership documents of our 885 Third Avenue investment, certain participating rights of the common member
expired. As a result, it was determined that this investment is a VIE in which we are the primary beneficiary, and the investment was consolidated in our
financial statements. Upon consolidating the entity, the assets and liabilities of the entity were recorded at fair value. Prior to January 2021, the
investment was accounted for under the equity method. See Note 6, "Investments in Unconsolidated Joint Ventures" and Note 16, "Fair Value
Measurements.
(2)
(3)
(4)
In April 2021, the Company exercised its option to acquire the fee interest in the property from the ground lessor and the Company acquired the fee
interest in June 2021. The Company held the leasehold interest in the property prior to exercising its option.
A third party has asserted ownership rights to the fee, which the Company is contesting.
In September 2021, the Company was the successful bidder for the fee interest in 690 Madison Avenue at the foreclosure of the asset. The property
previously served as collateral for a debt and preferred equity investment. We recorded the assets acquired and liabilities assumed at fair value. See Note
5, "Debt and Preferred Equity Investments" and Note 16, "Fair Value Measurements."
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
4. Properties Held for Sale and Property Dispositions
Properties Held for Sale
As of December 31, 2021, 1080 Amsterdam Avenue and 707 Eleventh Avenue were classified as held for sale as we
entered into an agreement to sell the properties, both in Manhattan, for a total consideration of $42.5 million and $95.0 million,
respectively. The sales of 1080 Amsterdam Avenue and 707 Eleventh Avenue are expected to close in the first quarter of 2022,
both subject to customary closing conditions.
The Company recorded a $15.0 million charge in connection with the classification of 707 Eleventh Avenue as held for
sale, which is included in Depreciable real estate reserves and impairments in the consolidated statement of operations.
Property Dispositions
The following table summarizes the properties sold during the years ended December 31, 2021, 2020, and 2019:
Property
110 East 42nd Street
590 Fifth Avenue
220 East 42nd Street (3)
635-641 Sixth Avenue
106 Spring Street (4)
133 Greene Street (4)
712 Madison Avenue (5)
30 East 40th Street
Disposition
Date
December 2021
October 2021
July 2021
June 2021
March 2021
February 2021
January 2021
Property Type
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
December 2020
Leasehold Interest
1055 Washington Boulevard
December 2020
Leasehold Interest
Williamsburg Terrace
410 Tenth Avenue
400 East 58th Street
609 Fifth Avenue - Retail
Condominium
December 2020
December 2020
September 2020
Fee Interest
Fee Interest
Fee Interest
May 2020
Fee Interest
315 West 33rd Street - The Olivia
Suburban Properties (6)
1640 Flatbush Avenue
562 Fifth Avenue
1010 Washington Boulevard (7)
115 Spring Street (8)
March 2020
December 2019
December 2019
December 2019
November 2019
August 2019
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Unaudited
Approximate
Usable Square
Feet
Sales Price (1)
(in millions)
Gain (Loss) on
Sale (2)
(in millions)
215,400 $
117.1 $
103,300
1,135,000
267,000
5,928
6,425
6,600
69,446
182,000
52,000
638,000
140,000
21,437
492,987
1,107,000
1,000
42,635
143,400
5,218
103.0
783.5
325.0
35.0
15.8
43.0
5.2
23.8
32.0
952.5
62.0
168.0
446.5
229.2
16.2
52.4
23.1
66.6
3.6
(3.2)
175.1
99.4
(2.8)
0.2
(1.4)
(1.6)
(11.5)
11.8
56.4
8.3
63.3
71.8
1.8
5.5
(26.6)
(7.1)
3.6
(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 $13.7 million, $10.5 million, and $2.0 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, amounts do not include adjustments for expenses
recorded in subsequent periods.
In July 2021, the Company sold a 49% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC
810, and the deconsolidation of the 51.0% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value
adjustment of $206.8 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 the first quarter of 2021, the property was foreclosed by the lender.
Disposition resulted from the buyer exercising its purchase option under a ground lease arrangement.
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."
5. Debt and Preferred Equity Investments
and 2020 (in thousands):
Below is a summary of the activity in our debt and preferred equity investments for the years ended December 31, 2021
Balance at beginning of year (1)
Debt investment originations/fundings/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, 2021
December 31, 2020
$
1,076,542 $
1,580,306
193,824
13,220
(201,446)
6,583
389,300
167,042
(1,048,643)
(11,463)
$
1,088,723 $
1,076,542
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, 2021 (dollars in thousands):
Type
Carrying
Value
Face
Value
Interest
Carrying
Rate
Value
Face
Value
Interest
Rate
Total
Carrying
Value
Senior
Financing Maturity(1)
Floating Rate
Fixed Rate
Senior Mortgage Debt
$ 22,646 $ 22,841
3.50%
$ 73,000 $ 73,000
3.00%
$
95,646 $
—
2022 - 2023
Mezzanine Debt
272,324 273,274
447,747 457,474
720,071 4,664,200
2022 - 2029
L + 3.50 -
L + 5.00 -
12.57%
Preferred Equity
—
—
—
273,006 273,821
273,006 1,962,750
2022 - 2027
Balance at end of period $ 294,970 $ 296,115
$ 793,753 $ 804,295
$ 1,088,723 $ 6,626,950
(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, 2021, 2020
and 2019 (in thousands):
2.90 -
14.30%
6.50 -
11.00%
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,
2021
2020
2019
$
13,213 $
1,750 $
5,750
—
—
27,803
20,693
(6,583)
(37,033)
$
6,630 $
13,213 $
—
—
(4,000)
1,750
(1)
(2)
Includes $0.0 million and $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2021 and 2020,
respectively. These charges are included in loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations.
As of December 31, 2021, all financing receivables on non-accrual had an allowance for loan loss except for one debt investment with a carrying value
of $225.4 million.
As of December 31, 2021, all debt and preferred equity investments were performing in accordance with their respective
terms, with the exception of two investments with a carrying value, net of reserves, of $216.0 million and $6.8 million, as
discussed in the Debt Investments and Preferred Equity Investments tables further below.
As of 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 the Debt
Investments table further below.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
4. Properties Held for Sale and Property Dispositions
Properties Held for Sale
As of December 31, 2021, 1080 Amsterdam Avenue and 707 Eleventh Avenue were classified as held for sale as we
entered into an agreement to sell the properties, both in Manhattan, for a total consideration of $42.5 million and $95.0 million,
respectively. The sales of 1080 Amsterdam Avenue and 707 Eleventh Avenue are expected to close in the first quarter of 2022,
both subject to customary closing conditions.
The Company recorded a $15.0 million charge in connection with the classification of 707 Eleventh Avenue as held for
sale, which is included in Depreciable real estate reserves and impairments in the consolidated statement of operations.
The following table summarizes the properties sold during the years ended December 31, 2021, 2020, and 2019:
5. Debt and Preferred Equity Investments
Below is a summary of the activity in our debt and preferred equity investments for the years ended December 31, 2021
and 2020 (in thousands):
Balance at beginning of year (1)
Debt investment originations/fundings/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, 2021
December 31, 2020
$
1,076,542 $
1,580,306
193,824
13,220
(201,446)
6,583
389,300
167,042
(1,048,643)
(11,463)
$
1,088,723 $
1,076,542
Unaudited
Approximate
Usable Square
Property Type
Feet
Sales Price (1)
(in millions)
Gain (Loss) on
Sale (2)
(in millions)
(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.
215,400 $
117.1 $
Below is a summary of our debt and preferred equity investments as of December 31, 2021 (dollars in thousands):
Type
Carrying
Value
Face
Value
Interest
Rate
Carrying
Value
Face
Value
Interest
Rate
Floating Rate
Fixed Rate
Total
Carrying
Value
Senior
Financing Maturity(1)
Senior Mortgage Debt
$ 22,646 $ 22,841
Mezzanine Debt
272,324 273,274
L + 3.50 -
3.50%
L + 5.00 -
12.57%
$ 73,000 $ 73,000
447,747 457,474
Preferred Equity
—
—
—
273,006 273,821
3.00%
2.90 -
14.30%
6.50 -
11.00%
$
95,646 $
—
2022 - 2023
720,071 4,664,200
2022 - 2029
273,006 1,962,750
2022 - 2027
Balance at end of period $ 294,970 $ 296,115
$ 793,753 $ 804,295
$ 1,088,723 $ 6,626,950
(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, 2021, 2020
and 2019 (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)
2021
December 31,
2020
2019
$
13,213 $
1,750 $
5,750
—
—
27,803
20,693
(6,583)
(37,033)
$
6,630 $
13,213 $
—
—
(4,000)
1,750
(1)
(2)
Includes $0.0 million and $19.0 million of charges recorded against investments that were sold during the year ended December 31, 2021 and 2020,
respectively. These charges are included in loan loss and other investment reserves, net of recoveries, in our consolidated statements of operations.
As of December 31, 2021, all financing receivables on non-accrual had an allowance for loan loss except for one debt investment with a carrying value
of $225.4 million.
As of December 31, 2021, all debt and preferred equity investments were performing in accordance with their respective
terms, with the exception of two investments with a carrying value, net of reserves, of $216.0 million and $6.8 million, as
discussed in the Debt Investments and Preferred Equity Investments tables further below.
As of 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 the Debt
Investments table further below.
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Property Dispositions
Property
110 East 42nd Street
590 Fifth Avenue
220 East 42nd Street (3)
635-641 Sixth Avenue
106 Spring Street (4)
133 Greene Street (4)
712 Madison Avenue (5)
30 East 40th Street
Williamsburg Terrace
410 Tenth Avenue
400 East 58th Street
609 Fifth Avenue - Retail
Condominium
Disposition
Date
December 2021
October 2021
July 2021
June 2021
March 2021
February 2021
January 2021
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
December 2020
December 2020
September 2020
Fee Interest
Fee Interest
Fee Interest
May 2020
Fee Interest
1055 Washington Boulevard
December 2020
Leasehold Interest
December 2020
Leasehold Interest
315 West 33rd Street - The Olivia
March 2020
Suburban Properties (6)
1640 Flatbush Avenue
562 Fifth Avenue
1010 Washington Boulevard (7)
115 Spring Street (8)
December 2019
December 2019
December 2019
November 2019
August 2019
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
Fee Interest
103,300
1,135,000
267,000
5,928
6,425
6,600
69,446
182,000
52,000
638,000
140,000
21,437
492,987
1,107,000
1,000
42,635
143,400
5,218
103.0
783.5
325.0
35.0
15.8
43.0
5.2
23.8
32.0
952.5
62.0
168.0
446.5
229.2
16.2
52.4
23.1
66.6
3.6
(3.2)
175.1
99.4
(2.8)
0.2
(1.4)
(1.6)
(11.5)
11.8
56.4
8.3
63.3
71.8
1.8
5.5
(26.6)
(7.1)
3.6
(1)
(2)
(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 $13.7 million, $10.5 million, and $2.0 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, amounts do not include adjustments for expenses
recorded in subsequent periods.
(3)
In July 2021, the Company sold a 49% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC
810, and the deconsolidation of the 51.0% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value
adjustment of $206.8 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 the first quarter of 2021, the property was foreclosed by the lender.
Disposition resulted from the buyer exercising its purchase option under a ground lease arrangement.
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."
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
No other financing receivables were 90 days past due as of December 31, 2021 and 2020 with the exception of a
$27.7 million financing receivable included in Other assets, which was put on non-accrual in August 2018 as a result of an
interest default.
Debt Investments
As of December 31, 2021 and 2020, we held the following debt investments with an aggregate weighted average current
yield of 6.52%, as of December 31, 2021 (dollars in thousands):
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of
December 31, 2021 and 2020 ($ 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, 2021
December 31, 2020
$
$
644,489 $
437,344
6,890
695,035
365,167
16,340
1,088,723 $
1,076,542
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by year of
origination and risk rating as of December 31, 2021 (dollars in thousands):
Risk Rating
2021(1)
2020(1)
As of December 31,
2019(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$
139,873 $
151,086 $
57,511 $
296,019 $
644,489
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
—
—
133,735
260,242
—
—
43,367
6,890
437,344
6,890
$
139,873 $
284,821 $
317,753 $
346,276 $
1,088,723
(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 as of December 31, 2021 and 2020
comprised of commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in Other assets is an additional amount of financing receivables representing loans to joint venture partners
totaling $50.3 million and $66.2 million as of December 31, 2021 and 2020, respectively. The Company recorded provisions
for loan losses related to these financing receivables of $2.9 million and $14.6 million for the years ended December 31, 2021
and 2020, respectively. The Company recorded adjustments upon the adoption of ASC 326 of $11.4 million for the year 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 a $27.7 million financing receivable, which was put on nonaccrual in August 2018, that has a risk rating
of 3 and was fully reserved as of December 31, 2021.
Loan Type
Fixed Rate Investments:
Mezzanine Loan
Mortgage Loan
Mezzanine Loan (3)
Mezzanine Loan
Mezzanine Loan (4a)(5)
Mezzanine Loan
Mezzanine Loan (6)
Mezzanine Loan
Junior Mortgage
Mezzanine Loan
Mortgage/Mezzanine Loan
Total fixed rate
Floating Rate Investments:
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (4b)
Mezzanine Loan
Mortgage and Mezzanine Loan
Junior Mortgage Participation/
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mortgage Loan
Total floating rate
Allowance for loan loss
Total
$
$
$
$
$
December 31,
December 31,
2021
Future Funding
Obligations
2021
Senior
Financing
December 31,
December 31,
2021
2020
Carrying Value (1)
Carrying Value (1)
Maturity
Date (2)
$
— $
280,000 $
43,521 $
41,057
August 2022
— $
2,929,431 $
527,377 $
477,509
— $
275,000 $
49,998 $
—
—
—
—
—
—
—
—
—
—
4,933
—
3,932
23,360
43,415
—
—
—
—
376,705
274,976
105,000
95,000
1,712,750
85,000
—
—
—
180,415
1,115,000
54,000
—
110,354
—
—
—
73,000
225,367
66,873
13,366
30,000
55,250
20,000
—
—
—
37,511
133,735
8,050
34,874
30,802
—
—
—
75,640 $
1,734,769 $
294,970 $
— $
— $
(6,630) $
75,640 $
4,664,200 $
815,717 $
April 2023
June 2023
June 2023
June 2024
January 2025
June 2027
20,000 December 2029
225,204
—
—
13,366
30,000
55,250
32,888
3,500
56,244
49,956
35,318
April 2022
July 2022
127,915
March 2022
6,858
May 2022
14,011 December 2022
19,889
May 2023
15,733
29,106
53,674
352,460
(13,213)
816,756
(1)
(2)
(3)
(4)
(5)
Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
Represents contractual maturity, excluding any extension options to the extent they have not been exercised as of the date of this filing.
This loan was put on non-accrual in July 2020 and remains on non-accrual as of December 31, 2021. No investment income has been recognized
subsequent to it being put on non-accrual. The Company is in discussions with the borrower.
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, and (b) $0.4 million.
This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of December 31, 2021. No investment income has
been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower. Additionally, we determined the borrower
(6)
The borrower under this mezzanine loan is an entity affiliated with HNA, which owns an equity interest in 245 Park Avenue. The borrower filed for
entity to be a VIE in which we are not the primary beneficiary.
bankruptcy protection on October 31, 2021, which the Company contested.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
No other financing receivables were 90 days past due as of December 31, 2021 and 2020 with the exception of a
Debt Investments
$27.7 million financing receivable included in Other assets, which was put on non-accrual in August 2018 as a result of an
interest default.
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of
December 31, 2021 and 2020 ($ 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, 2021
December 31, 2020
$
$
644,489 $
437,344
6,890
695,035
365,167
16,340
1,088,723 $
1,076,542
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by year of
origination and risk rating as of December 31, 2021 (dollars in thousands):
Risk Rating
2021(1)
2020(1)
2019(1)
Prior(1)
Total
1 - Low Risk Assets - Low probability of loss
$
139,873 $
151,086 $
57,511 $
296,019 $
644,489
2 - Watch List Assets - Higher potential for loss
3 - High Risk Assets - Loss more likely than not
—
—
133,735
260,242
—
—
43,367
6,890
437,344
6,890
$
139,873 $
284,821 $
317,753 $
346,276 $
1,088,723
As of December 31,
(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 as of December 31, 2021 and 2020
comprised of commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in Other assets is an additional amount of financing receivables representing loans to joint venture partners
totaling $50.3 million and $66.2 million as of December 31, 2021 and 2020, respectively. The Company recorded provisions
for loan losses related to these financing receivables of $2.9 million and $14.6 million for the years ended December 31, 2021
and 2020, respectively. The Company recorded adjustments upon the adoption of ASC 326 of $11.4 million for the year 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 a $27.7 million financing receivable, which was put on nonaccrual in August 2018, that has a risk rating
of 3 and was fully reserved as of December 31, 2021.
As of December 31, 2021 and 2020, we held the following debt investments with an aggregate weighted average current
yield of 6.52%, as of December 31, 2021 (dollars in thousands):
Loan Type
Fixed Rate Investments:
Mezzanine Loan
Mortgage Loan
Mezzanine Loan (3)
Mezzanine Loan
Mezzanine Loan (4a)(5)
Mezzanine Loan
Mezzanine Loan (6)
Mezzanine Loan
Junior Mortgage
Mezzanine Loan
Mortgage/Mezzanine Loan
Total fixed rate
Floating Rate Investments:
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (4b)
Mezzanine Loan
Mortgage and Mezzanine Loan
Mezzanine Loan
Junior Mortgage Participation/
Mezzanine Loan
Mezzanine Loan
Mortgage Loan
Total floating rate
Allowance for loan loss
Total
December 31,
2021
Future Funding
Obligations
December 31,
2021
Senior
Financing
December 31,
2021
Carrying Value (1)
December 31,
2020
Carrying Value (1)
Maturity
Date (2)
$
— $
280,000 $
43,521 $
41,057
August 2022
—
—
—
—
—
—
—
—
—
—
—
376,705
274,976
105,000
95,000
1,712,750
85,000
—
—
—
73,000
225,367
66,873
13,366
30,000
55,250
20,000
—
—
—
—
April 2023
225,204
—
13,366
30,000
55,250
June 2023
June 2023
June 2024
January 2025
June 2027
20,000 December 2029
32,888
3,500
56,244
— $
2,929,431 $
527,377 $
477,509
— $
4,933
—
3,932
23,360
43,415
—
—
—
275,000 $
180,415
49,998 $
37,511
1,115,000
54,000
—
110,354
—
—
—
133,735
8,050
34,874
30,802
—
—
—
75,640 $
1,734,769 $
294,970 $
— $
— $
(6,630) $
75,640 $
4,664,200 $
815,717 $
49,956
35,318
April 2022
July 2022
127,915
March 2022
6,858
May 2022
14,011 December 2022
19,889
May 2023
15,733
29,106
53,674
352,460
(13,213)
816,756
$
$
$
$
$
(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 extension options to the extent they have not been exercised as of the date of this filing.
This loan was put on non-accrual in July 2020 and remains on non-accrual as of December 31, 2021. No investment income has been recognized
subsequent to it being put on non-accrual. The Company is in discussions with the borrower.
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, and (b) $0.4 million.
This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of December 31, 2021. No investment income has
been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower. Additionally, we determined the borrower
entity to be a VIE in which we are not the primary beneficiary.
The borrower under this mezzanine loan is an entity affiliated with HNA, which owns an equity interest in 245 Park Avenue. The borrower filed for
bankruptcy protection on October 31, 2021, which the Company contested.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Preferred Equity Investments
6. Investments in Unconsolidated Joint Ventures
As of December 31, 2021 and 2020, we held the following preferred equity investments with an aggregate weighted
We have investments in several real estate joint ventures with various partners. As of December 31, 2021, the book value of
average current yield of 9.87% as of December 31, 2021 (dollars in thousands):
these investments was $3.0 billion, net of investments with negative book values totaling $103.7 million for which we have an
December 31,
2021
Future Funding
Obligations
December 31,
2021
Senior
Financing
December 31, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)
Mandatory
Redemption (2)
$
$
$
$
— $
1,712,750 $
160,772 $
—
— $
— $
— $
250,000
112,234
1,962,750 $
273,006 $
— $
— $
1,962,750 $
273,006 $
154,691
105,095
259,786
—
259,786
June 2022
February 2027
implicit commitment to fund future capital needs.
As of December 31, 2021, 800 Third Avenue, 21 East 66th Street, and certain properties within the Stonehenge Portfolio are
VIEs in which we are not the primary beneficiary. 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 were not the primary beneficiary. Our net
equity investment in these VIEs was $85.6 million as of December 31, 2021 and $134.0 million as of December 31, 2020. 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.
Type
Preferred Equity (3)
Preferred Equity
Total Preferred Equity
Allowance for loan loss
Total
(1)
(2)
(3)
Carrying value is net of deferred origination fees.
Represents contractual redemption, excluding any unexercised extension options.
On October 31, 2021, HNA, through an affiliated entity, filed for Chapter 11 bankruptcy protection on account of its investment in 245 Park Avenue,
together with another asset in Chicago. The Company contested the filing, on the basis that the filing was done in bad faith and in violation of HNA's
agreements with the Company, and is currently appealing the Bankruptcy court’s ruling upholding the filing by HNA.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Preferred Equity Investments
6. Investments in Unconsolidated Joint Ventures
As of December 31, 2021 and 2020, we held the following preferred equity investments with an aggregate weighted
average current yield of 9.87% as of December 31, 2021 (dollars in thousands):
December 31,
December 31,
2021
Future Funding
Obligations
2021
Senior
Financing
December 31, 2021
Carrying Value (1)
December 31, 2020
Carrying Value (1)
Mandatory
Redemption (2)
$
$
$
$
— $
1,712,750 $
160,772 $
—
— $
— $
— $
250,000
112,234
1,962,750 $
273,006 $
— $
— $
1,962,750 $
273,006 $
154,691
105,095
259,786
—
259,786
June 2022
February 2027
Carrying value is net of deferred origination fees.
Represents contractual redemption, excluding any unexercised extension options.
On October 31, 2021, HNA, through an affiliated entity, filed for Chapter 11 bankruptcy protection on account of its investment in 245 Park Avenue,
together with another asset in Chicago. The Company contested the filing, on the basis that the filing was done in bad faith and in violation of HNA's
agreements with the Company, and is currently appealing the Bankruptcy court’s ruling upholding the filing by HNA.
Type
Preferred Equity (3)
Preferred Equity
Total Preferred Equity
Allowance for loan loss
Total
(1)
(2)
(3)
We have investments in several real estate joint ventures with various partners. As of December 31, 2021, the book value of
these investments was $3.0 billion, net of investments with negative book values totaling $103.7 million for which we have an
implicit commitment to fund future capital needs.
As of December 31, 2021, 800 Third Avenue, 21 East 66th Street, and certain properties within the Stonehenge Portfolio are
VIEs in which we are not the primary beneficiary. 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 were not the primary beneficiary. Our net
equity investment in these VIEs was $85.6 million as of December 31, 2021 and $134.0 million as of December 31, 2020. 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
The table below provides general information on each of our joint ventures as of December 31, 2021:
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the years ended December 31,
2021, 2020, and 2019:
Property
400 East 47th Street (3)
605 West 42nd Street - Sky
55 West 46th Street - Tower 46
885 Third Avenue (4)
333 East 22nd Street
21 East 66th Street (5)
521 Fifth Avenue
131-137 Spring Street
Stonehenge Portfolio (partial)
Ownership
Interest Sold
Disposition Date
Gross Asset
Valuation
(in millions)
Gain (Loss)
on Sale
(in millions) (1) (2)
September 2021
$
133.5
$
41.00%
20.00%
25.00%
N/A
33.33%
50.50%
20.00%
Various
June 2021
March 2021
January 2021
December 2020
May 2019
January 2019
Various - 2019
1 residential unit
December 2019
858.1
275.0
N/A
1.6
2.9
381.0
216.0
468.8
(1.0)
8.9
(15.2)
N/A
3.0
0.3
57.9
17.7
(2.4)
(1)
(2)
(3)
(4)
Represents the Company's share of the gain or loss.
The gain on sale is net of $1.4 million, $0.0 million, and $4.0 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, gain (loss) amounts do not include adjustments for
expenses recorded in subsequent periods.
In connection with our agreement to sell the property in April 2021, we recorded a charge of $5.7 million, which is included in Depreciable real estate
reserves and impairments in the consolidated statements of operations.
In January 2021, pursuant to the partnership documents, certain participating rights of the common member expired. As a result, it was determined that we
are the primary beneficiary of the VIE and the investment was consolidated in our financial statements. See Note 3, "Property Acquisitions."
(5) We, together with our joint venture partner, closed on the sale of one residential unit at the property.
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,
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 as of December 31, 2021 and
2020, 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
Private Investors
Vornado Realty Trust
Canadian Pension Plan Investment Board
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
Stonehenge Portfolio (5) Various
11 Madison Avenue
One Vanderbilt Avenue National Pension Service of Korea/Hines Interest LP
Worldwide Plaza (6)
1515 Broadway
Allianz Real Estate of America
RXR Realty / New York REIT
Wharton Properties
Wharton Properties
PGIM Real Estate
2 Herald Square
Israeli Institutional Investor
115 Spring Street
15 Beekman (7)
85 Fifth Avenue
Private Investor
A fund managed by Meritz Alternative Investment Management
Wells Fargo
National Pension Service of Korea/Hines Interest LP/International
Investor
One Madison Avenue (8)
220 East 42nd Street (9) A fund managed by Meritz Alternative Investment Management
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%
60.00%
71.01%
24.95%
56.87%
51.00%
51.00%
20.00%
36.27%
25.50%
51.00%
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%
60.00%
71.01%
57,718
354,300
13,069
69,214
7,131
1,439,016
2,314,000
1,657,198
24.95%
2,048,725
56.87%
1,750,000
51.00%
51.00%
20.00%
36.27%
369,000
5,218
221,884
12,946
25.50%
1,048,700
51.00%
1,135,000
Various
Various
(1)
Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2021. Changes in ownership or economic
interests within the current year are disclosed in the notes below.
The joint venture owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(2)
(3) We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in two residential units at the property.
(4)
(5)
The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
During the fourth quarter of 2021, the Company recorded a $3.1 million charge in connection with the pending sale of this investment for a gross
consideration of approximately $1.0 million. This charge is included in Depreciable real estate reserves and impairments in the consolidated statement of
operations.
In May 2021, the Company and RXR Realty jointly acquired a 1.2% interest in the property previously held by a private investor. This resulted in an
increase in the Company's ownership interest of 0.6%.
In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company.
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%. As of December 31, 2021, the
total of the two partners' ownership interests based on equity contributed was 27.1%. In November 2021, the Company admitted an additional partner to the
development project for a committed aggregate equity investment totaling no less than $259.3 million. The partner's indirect ownership interest in the joint
venture is based on it's capital contributions, up to an aggregate maximum of 25.0%. The transaction did not meet sale accounting under ASC 860 and, as a
result, was treated as a secured borrowing for accounting purposes and is included in Other liabilities in our consolidated balance sheets at December 31,
2021.
In July 2021, the Company sold a 49% interest in the property, which resulted in the Company no longer retaining a controlling interest in the entity, as
defined in ASC 810, and the deconsolidation of the 51.0% interest we retained. We recorded our investment at fair value which resulted in the recognition of
a fair value adjustment of $206.8 million during the year ended December 31, 2021. The fair value of our investment was determined by the terms of the
joint venture agreement.
(6)
(7)
(8)
(9)
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the years ended December 31,
2021, 2020, and 2019:
Property
400 East 47th Street (3)
605 West 42nd Street - Sky
55 West 46th Street - Tower 46
885 Third Avenue (4)
333 East 22nd Street
21 East 66th Street (5)
521 Fifth Avenue
131-137 Spring Street
Stonehenge Portfolio (partial)
Ownership
Interest Sold
41.00%
20.00%
25.00%
N/A
33.33%
Disposition Date
September 2021
$
June 2021
March 2021
January 2021
December 2020
1 residential unit
December 2019
50.50%
20.00%
Various
May 2019
January 2019
Various - 2019
Gross Asset
Valuation
(in millions)
133.5
858.1
275.0
N/A
1.6
2.9
381.0
216.0
468.8
Gain (Loss)
on Sale
(in millions) (1) (2)
$
(1.0)
8.9
(15.2)
N/A
3.0
0.3
57.9
17.7
(2.4)
(1)
(2)
(3)
(4)
Represents the Company's share of the gain or loss.
The gain on sale is net of $1.4 million, $0.0 million, and $4.0 million of employee compensation accrued in connection with the realization of these
investment gains in the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, gain (loss) amounts do not include adjustments for
expenses recorded in subsequent periods.
In connection with our agreement to sell the property in April 2021, we recorded a charge of $5.7 million, which is included in Depreciable real estate
reserves and impairments in the consolidated statements of operations.
In January 2021, pursuant to the partnership documents, certain participating rights of the common member expired. As a result, it was determined that we
are the primary beneficiary of the VIE and the investment was consolidated in our financial statements. See Note 3, "Property Acquisitions."
(5) We, together with our joint venture partner, closed on the sale of one residential unit at the property.
220 East 42nd Street (9) A fund managed by Meritz Alternative Investment Management
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,
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 as of December 31, 2021 and
2020, respectively, are as follows (dollars in thousands):
The table below provides general information on each of our joint ventures as of December 31, 2021:
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
Stonehenge Portfolio (5) Various
11 Madison Avenue
PGIM Real Estate
One Vanderbilt Avenue National Pension Service of Korea/Hines Interest LP
Worldwide Plaza (6)
RXR Realty / New York REIT
1515 Broadway
Allianz Real Estate of America
2 Herald Square
Israeli Institutional Investor
115 Spring Street
Private Investor
15 Beekman (7)
A fund managed by Meritz Alternative Investment Management
85 Fifth Avenue
Wells Fargo
One Madison Avenue (8)
Investor
National Pension Service of Korea/Hines Interest LP/International
Ownership
Interest (1)
Economic
Interest (1)
Unaudited
Approximate
Square Feet
49.90%
10.92%
60.52%
51.00%
30.00%
50.00%
50.00%
55.00%
32.28%
50.00%
50.00%
60.00%
71.01%
24.95%
56.87%
51.00%
51.00%
20.00%
36.27%
25.50%
51.00%
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%
60.00%
71.01%
57,718
354,300
13,069
69,214
7,131
1,439,016
2,314,000
1,657,198
24.95%
2,048,725
56.87%
1,750,000
51.00%
51.00%
20.00%
36.27%
369,000
5,218
221,884
12,946
25.50%
1,048,700
51.00%
1,135,000
Various
Various
(1)
(2)
(4)
(5)
(6)
(7)
(8)
Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2021. Changes in ownership or economic
interests within the current year are disclosed in the notes below.
The joint venture 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 two residential units at the property.
The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
During the fourth quarter of 2021, the Company recorded a $3.1 million charge in connection with the pending sale of this investment for a gross
consideration of approximately $1.0 million. This charge is included in Depreciable real estate reserves and impairments in the consolidated statement of
operations.
increase in the Company's ownership interest of 0.6%.
In May 2021, the Company and RXR Realty jointly acquired a 1.2% interest in the property previously held by a private investor. This resulted in an
In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company.
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%. As of December 31, 2021, the
total of the two partners' ownership interests based on equity contributed was 27.1%. In November 2021, the Company admitted an additional partner to the
development project for a committed aggregate equity investment totaling no less than $259.3 million. The partner's indirect ownership interest in the joint
venture is based on it's capital contributions, up to an aggregate maximum of 25.0%. The transaction did not meet sale accounting under ASC 860 and, as a
result, was treated as a secured borrowing for accounting purposes and is included in Other liabilities in our consolidated balance sheets at December 31,
(9)
In July 2021, the Company sold a 49% interest in the property, which resulted in the Company no longer retaining a controlling interest in the entity, as
defined in ASC 810, and the deconsolidation of the 51.0% interest we retained. We recorded our investment at fair value which resulted in the recognition of
a fair value adjustment of $206.8 million during the year ended December 31, 2021. The fair value of our investment was determined by the terms of the
2021.
joint venture agreement.
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65
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Property
Fixed Rate Debt:
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
Worldwide Plaza
One Vanderbilt Avenue
Stonehenge Portfolio (4)
400 East 57th Street
885 Third Avenue
Total fixed rate debt
Floating Rate Debt:
1552 Broadway
280 Park Avenue
121 Greene Street
2 Herald Square
11 West 34th Street
220 East 42nd Street
115 Spring Street
100 Park Avenue
15 Beekman (5)
10 East 53rd Street
One Madison Avenue (6)
21 East 66th Street
One Vanderbilt Avenue
605 West 42nd Street
55 West 46th Street
Total floating rate debt
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Economic
Interest (1)
Current
Maturity Date
Final Maturity
Date (2)
Interest
Rate (3)
December 31,
2021
December 31,
2020
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
24.95 % November 2027 November 2027
71.01 %
Various
July 2031
Various
July 2031
Various
4.45% $
300,000 $
5.50%
4.46%
5.45%
3.60%
5.12%
3.93%
3.84%
3.37%
3.98%
2.95%
3.50%
355,328
210,000
65,000
12,000
500,000
801,845
1,400,000
177,000
1,200,000
3,000,000
195,493
—
—
300,000
355,328
210,000
65,000
12,000
500,000
820,607
1,400,000
177,000
1,200,000
—
195,899
97,024
272,000
$
8,216,666 $
5,604,858
Mortgages and other loans payable, net
50.00 %
October 2022
October 2022
L+ 2.65% $
193,132 $
195,000
50.00 % September 2022 September 2024
L+ 1.73%
1,200,000
1,200,000
50.00 % November 2022 November 2022
L+ 2.00%
51.00 % November 2022 November 2023
L+ 1.95%
30.00 %
51.00 %
January 2023
January 2023
L+ 1.45%
June 2023
June 2025
L+ 2.75%
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%
25.50 % November 2025 November 2026
L+ 3.35%
32.28 %
June 2033
June 2033
T+ 2.75%
13,228
200,989
23,000
510,000
65,550
360,000
43,566
220,000
169,629
632
—
—
—
15,000
214,500
23,000
—
65,550
360,000
11,212
220,000
—
677
1,210,329
550,000
192,524
(6)
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. 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 $19.6 million, $15.8 million and $13.0 million from these services, net of our ownership
share of the joint ventures, for the years ended December 31, 2021, 2020, and 2019, 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, as of December 31, 2021 and 2020, 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)
Deferred revenue/gain
Lease liabilities
Other liabilities
Equity
Total liabilities and equity
December 31, 2021 December 31, 2020
$
14,763,874 $
16,143,880
17,841,869 $
18,906,451
768,510
533,455
1,776,030
11,085,876 $
1,158,242
980,595
352,499
4,264,657
357,076
403,883
2,001,612
9,749,204
1,341,571
1,002,563
464,107
6,349,006
17,841,869 $
18,906,451
2,997,934 $
3,823,322
$
$
$
$
Company's investments in unconsolidated joint ventures
(1)
As of December 31, 2021, $544.4 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.
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years ended
December 31, 2021, 2020, and 2019 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
Depreciation and amortization
Total expenses
Loss on early extinguishment of debt
Net loss before gain on sale
Company's equity in net loss from unconsolidated joint ventures
Year Ended December 31,
2021
2020
2019
$
1,228,364 $
1,133,217 $
1,163,534
203,332
225,104
22,576
342,910
31,423
484,130
180,201
220,633
24,134
325,500
20,427
407,834
1,309,475 $
1,178,729 $
1,239,493
$
$
$
(2,017)
(83,128) $
(55,402) $
(194)
(45,706) $
(25,195) $
202,881
212,355
24,816
372,408
19,336
407,697
(1,031)
(76,990)
(34,518)
$
$
2,999,726 $
4,257,792
11,216,392 $
9,862,650
(130,516)
(113,446)
$
11,085,876 $
9,749,204
Total joint venture mortgages and other loans
payable
Deferred financing costs, net
Total joint venture mortgages and other loans
payable, net
(1)
(2)
(3)
(4)
(5)
Economic interest represents the Company's interests in the joint venture as of December 31, 2021. 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 conditions, including meeting tests based on the
operating performance of the property.
Interest rates as of December 31, 2021, 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").
Comprised of three mortgages totaling $132.2 million that mature in April 2028 and two mortgages totaling $63.3 million that mature in July 2029.
This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
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67
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Property
Fixed Rate Debt:
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
Worldwide Plaza
One Vanderbilt Avenue
Stonehenge Portfolio (4)
400 East 57th Street
885 Third Avenue
Total fixed rate debt
Floating Rate Debt:
1552 Broadway
280 Park Avenue
121 Greene Street
2 Herald Square
11 West 34th Street
220 East 42nd Street
115 Spring Street
100 Park Avenue
15 Beekman (5)
10 East 53rd Street
One Madison Avenue (6)
21 East 66th Street
One Vanderbilt Avenue
605 West 42nd Street
55 West 46th Street
Total floating rate debt
Economic
Interest (1)
Current
Maturity Date
Final Maturity
Date (2)
Interest
Rate (3)
December 31,
December 31,
2021
2020
4.45% $
300,000 $
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
24.95 % November 2027 November 2027
71.01 %
Various
July 2031
Various
July 2031
Various
5.50%
4.46%
5.45%
3.60%
5.12%
3.93%
3.84%
3.37%
3.98%
2.95%
3.50%
$
8,216,666 $
5,604,858
50.00 %
October 2022
October 2022
L+ 2.65% $
193,132 $
195,000
50.00 % September 2022 September 2024
L+ 1.73%
1,200,000
1,200,000
50.00 % November 2022 November 2022
L+ 2.00%
51.00 % November 2022 November 2023
L+ 1.95%
30.00 %
51.00 %
January 2023
January 2023
L+ 1.45%
June 2023
June 2025
L+ 2.75%
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%
25.50 % November 2025 November 2026
L+ 3.35%
32.28 %
June 2033
June 2033
T+ 2.75%
355,328
210,000
65,000
12,000
500,000
801,845
1,400,000
177,000
1,200,000
3,000,000
195,493
—
—
13,228
200,989
23,000
510,000
65,550
360,000
43,566
220,000
169,629
632
—
—
—
300,000
355,328
210,000
65,000
12,000
500,000
820,607
1,400,000
177,000
1,200,000
—
195,899
97,024
272,000
15,000
214,500
23,000
—
65,550
360,000
11,212
220,000
—
677
1,210,329
550,000
192,524
$
$
2,999,726 $
4,257,792
11,216,392 $
9,862,650
(130,516)
(113,446)
$
11,085,876 $
9,749,204
Total joint venture mortgages and other loans
payable
Deferred financing costs, net
Total joint venture mortgages and other loans
payable, net
(1)
(2)
(3)
(4)
(5)
Economic interest represents the Company's interests in the joint venture as of December 31, 2021. 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 conditions, including meeting tests based on the
operating performance of the property.
spread over the 30-day LIBOR ("L") or 1-year Treasury ("T").
Interest rates as of December 31, 2021, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated
Comprised of three mortgages totaling $132.2 million that mature in April 2028 and two mortgages totaling $63.3 million that mature in July 2029.
This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
(6)
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. 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 $19.6 million, $15.8 million and $13.0 million from these services, net of our ownership
share of the joint ventures, for the years ended December 31, 2021, 2020, and 2019, 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, as of December 31, 2021 and 2020, 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, 2021 December 31, 2020
$
14,763,874 $
16,143,880
768,510
533,455
1,776,030
357,076
403,883
2,001,612
17,841,869 $
18,906,451
11,085,876 $
1,158,242
980,595
352,499
4,264,657
9,749,204
1,341,571
1,002,563
464,107
6,349,006
17,841,869 $
18,906,451
2,997,934 $
3,823,322
$
$
$
$
(1)
As of December 31, 2021, $544.4 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.
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years ended
December 31, 2021, 2020, and 2019 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
Depreciation and amortization
Total expenses
Loss on early extinguishment of debt
Net loss before gain on sale
Company's equity in net loss from unconsolidated joint ventures
Year Ended December 31,
2021
2020
2019
$
1,228,364 $
1,133,217 $
1,163,534
203,332
225,104
22,576
342,910
31,423
484,130
180,201
220,633
24,134
325,500
20,427
407,834
202,881
212,355
24,816
372,408
19,336
407,697
$
$
$
1,309,475 $
1,178,729 $
1,239,493
(2,017)
(83,128) $
(55,402) $
(194)
(45,706) $
(25,195) $
(1,031)
(76,990)
(34,518)
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
7. Deferred Costs
Deferred costs as of December 31, 2021 and 2020 consisted of the following (in thousands):
Deferred leasing costs
Less: accumulated amortization
Deferred costs, net
8. Mortgages and Other Loans Payable
December 31,
2021
2020
$
$
400,419 $
(275,924)
124,495 $
447,002
(269,834)
177,168
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt
investments as of December 31, 2021 and 2020, 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)
Total fixed rate debt
Floating Rate Debt:
609 Fifth Avenue
7 Dey / 185 Broadway (4)
719 Seventh Avenue
690 Madison Avenue
220 East 42nd Street (5)
133 Greene Street
106 Spring Street
FHLB Facility
FHLB Facility
FHLB Facility
712 Madison Avenue
2017 Master Repurchase Agreement (6)
Total floating rate debt
Total fixed rate and floating rate debt
Mortgages reclassed to liabilities related to
assets held for sale
Total mortgages and other loans payable
Deferred financing costs, net of amortization
Total mortgages and other loans payable, net
Current
Maturity Date
Final Maturity
Date (1)
Interest
Rate (2)
December 31, 2021 December 31, 2020
July 2022
July 2022
4.68% $
200,212 $
October 2024
October 2040
January 2027
January 2027
February 2027
February 2027
February 2027
February 2027
3.99%
4.90%
4.25%
3.59%
288,660
100,000
450,000
34,537
204,875
294,035
100,000
450,000
34,773
$
1,073,409 $
1,083,683
March 2022
March 2025 L+ 2.95% $
52,882 $
November 2022 November 2023 L+ 2.85%
September 2023 September 2023 L+ 1.20%
July 2024
July 2025 L+ 1.60%
198,169
50,000
60,000
—
—
—
—
—
—
—
—
57,651
158,478
50,000
—
510,000
15,523
38,025
10,000
15,000
35,000
28,000
—
$
$
$
$
361,051 $
917,677
1,434,460 $
2,001,360
(34,537)
—
1,399,923 $
2,001,360
(5,537)
(21,388)
1,394,386 $
1,979,972
(1)
(2)
(3)
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, 2021, 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 $33.6 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.
(4)
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. In October 2021, an extension option was exercised, and the maturity date of this loan was extended by one year.
Advances under the loan are subject to incurred costs and funded equity requirements.
In July 2021, the Company sold a 49% interest in the property. See Note 4, "Property Dispositions."
(5)
(6)
In June 2021, we exercised a one year extension option which extended the maturity date to June 2022. As of December 31, 2021, there was no
outstanding balance on the $400.0 million facility.
As of December 31, 2021 and 2020, the gross book value of the properties and debt and preferred equity investments
collateralizing the mortgages and other loans payable was approximately $2.1 billion and $2.5 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. As a result of a Final Ruling from the Federal Housing Finance Authority, the regulator of the Federal Home Loan
Bank system, all captive insurance company memberships were terminated as of February 2021. As such, all advances to
Ticonderoga were repaid prior to such termination.
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, 2021, 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 2022. As of December 31, 2021, the facility had no outstanding balance.
9. Corporate Indebtedness
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was
previously amended by the Company in November 2017, or the 2017 credit facility, and was originally entered into by the
Company in November 2012, or the 2012 credit facility. As of December 31, 2021, the 2021 credit facility consisted of a $1.25
billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan
B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has
two six-month as-of-right extension options to May 15, 2027. 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, 2021, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points
with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans
under the revolving credit facility, (ii) 80 basis points to 160 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.
As of December 31, 2021, the applicable spread over adjusted Term SOFR plus 10 basis points was 85 basis points for
the revolving credit facility, 95 basis points for Term Loan A, and 100 basis points for Term Loan B. We are required to pay
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
7. Deferred Costs
Deferred costs as of December 31, 2021 and 2020 consisted of the following (in thousands):
December 31,
2021
2020
$
$
400,419 $
(275,924)
124,495 $
447,002
(269,834)
177,168
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt
investments as of December 31, 2021 and 2020, respectively, were as follows (dollars in thousands):
(4)
(5)
(6)
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. In October 2021, an extension option was exercised, and the maturity date of this loan was extended by one year.
Advances under the loan are subject to incurred costs and funded equity requirements.
In July 2021, the Company sold a 49% interest in the property. See Note 4, "Property Dispositions."
In June 2021, we exercised a one year extension option which extended the maturity date to June 2022. As of December 31, 2021, there was no
outstanding balance on the $400.0 million facility.
As of December 31, 2021 and 2020, the gross book value of the properties and debt and preferred equity investments
collateralizing the mortgages and other loans payable was approximately $2.1 billion and $2.5 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. As a result of a Final Ruling from the Federal Housing Finance Authority, the regulator of the Federal Home Loan
Bank system, all captive insurance company memberships were terminated as of February 2021. As such, all advances to
Ticonderoga were repaid prior to such termination.
Current
Final Maturity
Maturity Date
Date (1)
Interest
Rate (2)
December 31, 2021 December 31, 2020
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, 2021, 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 2022. As of December 31, 2021, the facility had no outstanding balance.
9. Corporate Indebtedness
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was
previously amended by the Company in November 2017, or the 2017 credit facility, and was originally entered into by the
Company in November 2012, or the 2012 credit facility. As of December 31, 2021, the 2021 credit facility consisted of a $1.25
billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan
B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has
two six-month as-of-right extension options to May 15, 2027. 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, 2021, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points
with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans
under the revolving credit facility, (ii) 80 basis points to 160 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.
As of December 31, 2021, the applicable spread over adjusted Term SOFR plus 10 basis points was 85 basis points for
the revolving credit facility, 95 basis points for Term Loan A, and 100 basis points for Term Loan B. We are required to pay
68
69
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Deferred leasing costs
Less: accumulated amortization
Deferred costs, net
8. Mortgages and Other Loans Payable
Property
Fixed Rate Debt:
100 Church Street
420 Lexington Avenue
Landmark Square
485 Lexington Avenue
1080 Amsterdam (3)
Total fixed rate debt
Floating Rate Debt:
609 Fifth Avenue
7 Dey / 185 Broadway (4)
719 Seventh Avenue
690 Madison Avenue
220 East 42nd Street (5)
133 Greene Street
106 Spring Street
FHLB Facility
FHLB Facility
FHLB Facility
712 Madison Avenue
2017 Master Repurchase Agreement (6)
Total floating rate debt
Total fixed rate and floating rate debt
Mortgages reclassed to liabilities related to
assets held for sale
Total mortgages and other loans payable
Deferred financing costs, net of amortization
Total mortgages and other loans payable, net
July 2022
July 2022
4.68% $
200,212 $
October 2024
October 2040
January 2027
January 2027
February 2027
February 2027
February 2027
February 2027
3.99%
4.90%
4.25%
3.59%
$
1,073,409 $
1,083,683
March 2022
March 2025 L+ 2.95% $
52,882 $
November 2022 November 2023 L+ 2.85%
September 2023 September 2023 L+ 1.20%
July 2024
July 2025 L+ 1.60%
288,660
100,000
450,000
34,537
198,169
50,000
60,000
—
—
—
—
—
—
—
—
204,875
294,035
100,000
450,000
34,773
57,651
158,478
50,000
—
510,000
15,523
38,025
10,000
15,000
35,000
28,000
—
$
$
$
$
361,051 $
917,677
1,434,460 $
2,001,360
(34,537)
—
1,399,923 $
2,001,360
(5,537)
(21,388)
1,394,386 $
1,979,972
the property.
(1)
(2)
(3)
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 rate as of December 31, 2021, 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 $33.6 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.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 2021, the facility
fee was 20 basis points.
As of December 31, 2021, we had $2.0 million of outstanding letters of credit, $390.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $860.0 million under
the 2021 credit facility. As of December 31, 2021 and December 31, 2020, the revolving credit facility had a carrying value of
$381.3 million and $105.3 million, respectively, net of deferred financing costs. As of December 31, 2021 and December 31,
2020, the term loan facilities had a carrying value of $1.2 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 2021 credit facility.
The 2021 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, 2021 and 2020,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
October 5, 2017 (2)
November 15, 2012 (3)
December 17, 2015 (4)
August 7, 2018
Deferred financing costs, net
December
31,
2021
Unpaid
Principal
Balance
December
31,
2021
Accreted
Balance
December
31,
2020
Accreted
Balance
$
500,000 $
499,913 $
499,803
300,000
100,000
—
301,002
100,000
—
302,086
100,000
350,000
900,000 $
900,915 $ 1,251,889
(1,607)
(3,670)
900,000 $
899,308 $ 1,248,219
$
$
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
3.25 %
4.50 %
4.27 %
— %
5
October 2022
10 December 2022
10 December 2025
3
August 2021
Interest expense before capitalized interest
Interest on financing leases
Interest capitalized
Interest income
Interest expense, net
Year Ended December 31,
2021
2020
2019
$
145,197 $
185,934 $
246,848
5,448
(78,365)
(1,389)
8,091
(75,167)
(2,179)
3,243
(55,446)
(4,124)
$
70,891 $
116,679 $
190,521
(1)
(2)
(3)
(4)
Interest rate as of December 31, 2021, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
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.
Restrictive Covenants
The terms of the 2021 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, 2021 and 2020, 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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71
Principal Maturities
Combined aggregate principal maturities of mortgages and other loans payable, the 2021 credit facility, trust preferred
securities, senior unsecured notes and our share of joint venture debt as of December 31, 2021, including as-of-right extension
options, were as follows (in thousands):
Scheduled
Amortization
Principal
Revolving
Credit
Facility
Unsecured
Term Loans
Trust
Preferred
Securities
Senior
Unsecured
Notes
Total
Joint
Venture
Debt
$
8,754 $ 448,835 $
— $
— $
— $ 800,000 $ 1,257,589 $ 426,057
6,583
5,268
812
841
70
50,000
332,749
—
—
—
—
—
390,000
200,000
—
—
—
—
—
—
—
56,583
538,017
750,696
616,510
100,000
100,812
1,391,185
390,841
150,486
—
—
—
—
Thereafter
580,548
—
1,050,000
100,000
1,730,618
2,435,913
$
22,328 $ 1,412,132 $ 390,000 $ 1,250,000 $ 100,000 $ 900,000 $ 4,074,460 $ 5,770,847
2022
2023
2024
2025
2026
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, 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. 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 $1.7 million, $1.4 million and $3.9 million for the years ended December 31, 2021, 2020 and 2019,
We also recorded expenses, inclusive of capitalized expenses, of $14.0 million, $13.3 million and $18.8 million for the
years ended December 31, 2021, 2020 and 2019, 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 $0.7 million, $0.6 million and $0.6 million for the
years ended December 31, 2021, 2020, and 2019 respectively.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 2021, the facility
fee was 20 basis points.
As of December 31, 2021, we had $2.0 million of outstanding letters of credit, $390.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $860.0 million under
the 2021 credit facility. As of December 31, 2021 and December 31, 2020, the revolving credit facility had a carrying value of
$381.3 million and $105.3 million, respectively, net of deferred financing costs. As of December 31, 2021 and December 31,
2020, the term loan facilities had a carrying value of $1.2 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 2021 credit facility.
The 2021 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, 2021 and 2020,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
October 5, 2017 (2)
November 15, 2012 (3)
December 17, 2015 (4)
August 7, 2018
December
31,
2021
Unpaid
Principal
Balance
December
December
31,
2021
Accreted
Balance
31,
2020
Accreted
Balance
$
500,000 $
499,913 $
499,803
300,000
100,000
—
301,002
100,000
—
302,086
100,000
350,000
900,000 $
900,915 $ 1,251,889
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
3.25 %
4.50 %
4.27 %
— %
October 2022
10 December 2022
10 December 2025
August 2021
5
3
Deferred financing costs, net
(1,607)
(3,670)
900,000 $
899,308 $ 1,248,219
$
$
Interest rate as of December 31, 2021, taking into account interest rate hedges in effect during the period.
Issued by the Operating Partnership with the Company as the guarantor.
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)
December 2022. The notes were priced at 105.334% of par.
Issued by the Company and the Operating Partnership as co-obligors.
Restrictive Covenants
The terms of the 2021 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, 2021 and 2020, 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.
Principal Maturities
Combined aggregate principal maturities of mortgages and other loans payable, the 2021 credit facility, trust preferred
securities, senior unsecured notes and our share of joint venture debt as of December 31, 2021, including as-of-right extension
options, were as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Scheduled
Amortization
Principal
Revolving
Credit
Facility
Unsecured
Term Loans
Trust
Preferred
Securities
Senior
Unsecured
Notes
Total
Joint
Venture
Debt
$
8,754 $ 448,835 $
— $
— $
— $ 800,000 $ 1,257,589 $ 426,057
6,583
5,268
812
841
70
50,000
332,749
—
—
—
—
—
390,000
—
200,000
—
—
—
—
—
—
580,548
—
1,050,000
100,000
—
—
56,583
538,017
750,696
616,510
100,000
100,812
1,391,185
—
—
390,841
150,486
1,730,618
2,435,913
$
22,328 $ 1,412,132 $ 390,000 $ 1,250,000 $ 100,000 $ 900,000 $ 4,074,460 $ 5,770,847
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
2021
$
145,197 $
185,934 $
246,848
5,448
(78,365)
(1,389)
8,091
(75,167)
(2,179)
3,243
(55,446)
(4,124)
$
70,891 $
116,679 $
190,521
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, 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. 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 $1.7 million, $1.4 million and $3.9 million for the years ended December 31, 2021, 2020 and 2019,
respectively.
We also recorded expenses, inclusive of capitalized expenses, of $14.0 million, $13.3 million and $18.8 million for the
years ended December 31, 2021, 2020 and 2019, 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 $0.7 million, $0.6 million and $0.6 million for the
years ended December 31, 2021, 2020, and 2019 respectively.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
One Vanderbilt Avenue Investment
Common Units of Limited Partnership Interest in the Operating Partnership
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 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. As of December 31, 2021, stabilization of the property was achieved.
One Vanderbilt Avenue Leases
In November 2018, we entered into a lease agreement with the One Vanderbilt Avenue joint venture covering certain
floors at the property. In March 2021, the lease commenced and we relocated our corporate headquarters to the leased space.
For the year ended December 31, 2021, we recorded $2.4 million of rent expense under the lease. Additionally, in June 2021,
we entered into a lease agreement with the One Vanderbilt Avenue joint venture for SUMMIT One Vanderbilt, which
commenced in October 2021. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under the lease.
See Note 20, “Commitments and Contingencies.”
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 as of December 31, 2021 and 2020 consisted of the following (in
thousands):
Due from joint ventures
Other
Related party receivables
December 31,
2021
2020
$
$
28,204 $
1,204
29,408 $
27,006
7,651
34,657
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.
As of December 31, 2021 and 2020, the noncontrolling interest unit holders owned 5.57%, or 3,781,565 units, and
5.59%, or 3,938,823 units, of the Operating Partnership, respectively, inclusive of retroactive adjustments to reflect the reverse
stock split effectuated by SL Green in January 2022. As of December 31, 2021, 3,781,565 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 for twelve months
ended December 31, 2021 and 2020 (in thousands):
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,
2021
2020
$
358,262 $
409,862
(15,749)
18,678
(53,289)
25,457
1,042
9,851
(12,652)
12,018
(36,085)
20,016
(2,299)
(32,598)
$
344,252 $
358,262
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,
2021:
Issuance
Series A (4)
Series F
Series G (5)
Series K
Series L
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
Annual
Dividend
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
3.50 %
700,000
4.00 %
500,000
4.00 %
200,000
3.50 %
268,000
3.50 %
400,000
563,954
378,634
200,000
268,000
400,000
718,697
341,677
372,634
200,000
268,000
400,000
4.00 % 1,077,280
1,077,280
1,077,280
3.50 %
40,000
40,000
40,000
1.1250
0.8750
1.0000
1.0000
0.8750
0.8750
1.0000
0.8750
25.00
25.00
25.00
25.00
25.00
25.00
25.00
25.00
29.12
88.50
January 2007
January 2012
134.67
August 2014
148.95
154.89
—
—
—
—
August 2014
July 2015
July 2015
August 2015
August 2015
May 2019
(6)
1
1
1
(6)
(6)
(6)
January 2020
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, 2021, 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 provided the holder with the right to require the Operating Partnership to repurchase the Series G
Preferred Units for cash before January 31, 2022, which the holder did not execute.
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73
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
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 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. As of December 31, 2021, stabilization of the property was achieved.
One Vanderbilt Avenue Leases
In November 2018, we entered into a lease agreement with the One Vanderbilt Avenue joint venture covering certain
floors at the property. In March 2021, the lease commenced and we relocated our corporate headquarters to the leased space.
For the year ended December 31, 2021, we recorded $2.4 million of rent expense under the lease. Additionally, in June 2021,
we entered into a lease agreement with the One Vanderbilt Avenue joint venture for SUMMIT One Vanderbilt, which
commenced in October 2021. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under the lease.
See Note 20, “Commitments and Contingencies.”
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 as of December 31, 2021 and 2020 consisted of the following (in
December 31,
2021
2020
$
$
28,204 $
1,204
29,408 $
27,006
7,651
34,657
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.
Other
thousands):
Due from joint ventures
Other
Related party receivables
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
One Vanderbilt Avenue Investment
Common Units of Limited Partnership Interest in the Operating Partnership
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
ended December 31, 2021 and 2020 (in thousands):
As of December 31, 2021 and 2020, the noncontrolling interest unit holders owned 5.57%, or 3,781,565 units, and
5.59%, or 3,938,823 units, of the Operating Partnership, respectively, inclusive of retroactive adjustments to reflect the reverse
stock split effectuated by SL Green in January 2022. As of December 31, 2021, 3,781,565 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 for twelve months
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,
2021
2020
$
358,262 $
409,862
(15,749)
18,678
(53,289)
25,457
1,042
9,851
(12,652)
12,018
(36,085)
20,016
(2,299)
(32,598)
$
344,252 $
358,262
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,
2021:
Issuance
Series A (4)
Series F
Series G (5)
Series K
Series L
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
Annual
Dividend
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
3.50 %
700,000
4.00 %
500,000
4.00 %
200,000
3.50 %
268,000
3.50 %
400,000
563,954
378,634
200,000
268,000
400,000
718,697
341,677
372,634
200,000
268,000
400,000
4.00 % 1,077,280
1,077,280
1,077,280
3.50 %
40,000
40,000
40,000
1.1250
0.8750
1.0000
1.0000
0.8750
0.8750
1.0000
0.8750
25.00
25.00
25.00
25.00
25.00
25.00
25.00
25.00
29.12
88.50
134.67
—
—
148.95
154.89
—
—
January 2007
January 2012
August 2014
August 2014
July 2015
July 2015
August 2015
August 2015
May 2019
(6)
1
1
1
(6)
(6)
(6)
January 2020
(1)
(2)
(3)
(4)
(5)
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, 2021, 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 provided the holder with the right to require the Operating Partnership to repurchase the Series G
Preferred Units for cash before January 31, 2022, which the holder did not execute.
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73
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
(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.
Below is a summary of the activity relating to the preferred units in the Operating Partnership for the twelve months
ended December 31, 2021 and 2020 (in thousands):
Balance at beginning of period
Issuance of preferred units
Redemption of preferred units
Dividends paid on preferred units
Accrued dividends on preferred units
Balance at end of period
12. Stockholders’ Equity of the Company
Common Stock
December 31,
2021
2020
$
202,169 $
283,285
—
(6,040)
(6,760)
6,706
—
(82,750)
(6,163)
7,797
$
196,075 $
202,169
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, 2021, 64,105,276 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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 $1.0 billion share repurchase program under which we can buy 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.
As of December 31, 2021, share repurchases, excluding the redemption of OP Units, executed under the program were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Perpetual Preferred Stock
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
share
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
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 2021, 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, 2021, 2020, and 2019, respectively (dollars in
thousands):
Year Ended December 31,
2021
2020
2019
10,387
16,181
3,645
334
Dividend reinvestments/stock purchases under the DRSPP
$
738 $
1,006 $
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.
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75
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
(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.
Below is a summary of the activity relating to the preferred units in the Operating Partnership for the twelve months
ended December 31, 2021 and 2020 (in thousands):
Balance at beginning of period
Issuance of preferred units
Redemption of preferred units
Dividends paid on preferred units
Accrued dividends on preferred units
Balance at end of period
12. Stockholders’ Equity of the Company
Common Stock
December 31,
2021
2020
$
202,169 $
283,285
—
(6,040)
(6,760)
6,706
—
(82,750)
(6,163)
7,797
$
196,075 $
202,169
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, 2021, 64,105,276 shares of common stock and no
shares of excess stock were issued and outstanding.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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 $1.0 billion share repurchase program under which we can buy 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.
As of December 31, 2021, share repurchases, excluding the redemption of OP Units, executed under the program were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Perpetual Preferred Stock
Shares repurchased
Average price paid per
share
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
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 2021, 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, 2021, 2020, and 2019, respectively (dollars in
thousands):
Year Ended December 31,
2021
2020
2019
Shares of common stock issued
10,387
16,181
Dividend reinvestments/stock purchases under the DRSPP
$
738 $
1,006 $
3,645
334
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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green's earnings per share for the years ended December 31, 2021, 2020, and 2019 are computed as follows (in
All unit-related references and measurements including the number of units outstanding and earnings per unit have been
thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2021
2020
2019
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.
As of December 31, 2021, limited partners other than SL Green owned 3,781,565 common units of the Operating
Income attributable to SL Green common stockholders
$
434,804 $
356,105 $
255,484
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
(2,398)
(192)
(1,685)
(137)
(1,700)
—
Net income attributable to SL Green common stockholders (numerator for basic
earnings per share)
Add back: dilutive effect of earnings allocated to participating securities and
contingently issuable shares
Add back: undistributed earnings allocated to participating securities
Add back: Effect of dilutive securities (redemption of units to common shares)
Income attributable to SL Green common stockholders (numerator for diluted
earnings per share)
$
432,214 $
354,283 $
253,784
2,039
192
25,457
1,685
137
20,016
1,700
—
13,301
$
459,902 $
376,121 $
268,785
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
Diluted weighted average common stock outstanding
Year Ended December 31,
2021
2020
2019
65,740
70,397
77,057
3,987
705
337
70,769
4,096
441
144
75,078
4,275
533
—
81,865
The Company has excluded 948,017, 1,676,825 and 1,181,014 common stock equivalents from the calculation of diluted
shares outstanding for the years ended December 31, 2021, 2020, and 2019 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 as of December 31, 2021 owned
64,105,276 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.
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77
Limited Partner Units
Partnership.
Preferred Units
Earnings per Unit
computed as follows (in thousands):
Numerator
Basic Earnings:
earnings per unit)
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, 2021, 2020, and 2019 respectively are
Year Ended December 31,
2021
2020
2019
Net income attributable to SLGOP common unitholders (numerator for diluted
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
$
460,261 $
376,121 $
268,785
(2,398)
(192)
(1,685)
(137)
(1,700)
—
Net Income attributable to SLGOP common unitholders (numerator for basic
earnings per unit)
Add back: dilutive effect of earnings allocated to participating securities and
contingently issuable shares
$
457,671 $
374,299 $
267,085
2,590
1,822
1,700
Income attributable to SLGOP common unitholders
$
460,261 $
376,121 $
268,785
Weighted average common units outstanding
69,667
74,493
81,332
Denominator
Basic units:
Effect of Dilutive Securities:
Stock-based compensation plans
Contingently issuable units
Diluted weighted average common units outstanding
Year Ended December 31,
2021
2020
2019
765
337
441
144
543
(10)
70,769
75,078
81,865
The Operating Partnership has excluded 948,017, 1,676,825 and 1,181,014 common unit equivalents from the diluted
units outstanding for the years ended December 31, 2021, 2020, and 2019, respectively, as they were anti-dilutive.
14. Share-based Compensation
We have share-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.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green's earnings per share for the years ended December 31, 2021, 2020, and 2019 are computed as follows (in
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.
Year Ended December 31,
2021
2020
2019
Limited Partner Units
As of December 31, 2021, limited partners other than SL Green owned 3,781,565 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, 2021, 2020, and 2019 respectively are
computed as follows (in thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2021
2020
2019
Net income attributable to SLGOP common unitholders (numerator for diluted
earnings per unit)
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
$
460,261 $
376,121 $
268,785
(2,398)
(192)
(1,685)
(137)
(1,700)
—
Net Income attributable to SLGOP common unitholders (numerator for basic
earnings per unit)
Add back: dilutive effect of earnings allocated to participating securities and
contingently issuable shares
$
457,671 $
374,299 $
267,085
2,590
1,822
1,700
Income attributable to SLGOP common unitholders
$
460,261 $
376,121 $
268,785
Denominator
Basic units:
Year Ended December 31,
2021
2020
2019
Weighted average common units outstanding
69,667
74,493
81,332
Effect of Dilutive Securities:
Stock-based compensation plans
Contingently issuable units
Diluted weighted average common units outstanding
765
337
441
144
543
(10)
70,769
75,078
81,865
The Operating Partnership has excluded 948,017, 1,676,825 and 1,181,014 common unit equivalents from the diluted
units outstanding for the years ended December 31, 2021, 2020, and 2019, respectively, as they were anti-dilutive.
14. Share-based Compensation
We have share-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.
thousands):
Numerator
Basic Earnings:
Income attributable to SL Green common stockholders
$
434,804 $
356,105 $
255,484
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
(2,398)
(192)
(1,685)
(137)
(1,700)
—
Net income attributable to SL Green common stockholders (numerator for basic
earnings per share)
Add back: dilutive effect of earnings allocated to participating securities and
contingently issuable shares
Add back: undistributed earnings allocated to participating securities
Add back: Effect of dilutive securities (redemption of units to common shares)
Income attributable to SL Green common stockholders (numerator for diluted
earnings per share)
$
432,214 $
354,283 $
253,784
2,039
192
25,457
1,685
137
20,016
1,700
—
13,301
$
459,902 $
376,121 $
268,785
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
Diluted weighted average common stock outstanding
Year Ended December 31,
2021
2020
2019
65,740
70,397
77,057
3,987
705
337
70,769
4,096
441
144
75,078
4,275
533
—
81,865
The Company has excluded 948,017, 1,676,825 and 1,181,014 common stock equivalents from the calculation of diluted
shares outstanding for the years ended December 31, 2021, 2020, and 2019 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 as of December 31, 2021 owned
64,105,276 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 2021, 2.0 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. There were no options granted during the years ended December 31, 2021, 2020,
and 2019.
A summary of the status of the Company's stock options as of December 31, 2021, 2020, and 2019 and changes during
the years ended December 31, 2021, 2020, and 2019 are as follows:
stock options.
2021
2020
2019
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Balance at beginning of year
761,686 $
105.76
977,745 $
108.57
1,071,977 $
109.82
Exercised
Lapsed or canceled
Balance at end of year
(11,314)
(356,283)
72.30
112.56
—
—
—
—
(216,059)
118.49
(94,232)
122.84
394,089 $
100.56
761,686 $
105.76
977,745 $
108.57
Options exercisable at end of year
394,089 $
100.56
760,743 $
105.76
862,593 $
107.86
units.
The remaining weighted average contractual life of the options outstanding was 2.3 years and the remaining weighted
average contractual life of the options exercisable was 2.3 years.
During the years ended December 31, 2021, 2020, and 2019, we recognized compensation expense for these options of
$0.0 million, $0.0 million, and $2.5 million, respectively. As of December 31, 2021, there was no unrecognized compensation
cost related to unvested stock options.
Restricted Shares
Shares are granted to certain employees, including our executives, and vesting occurs upon the completion of a service
period or our meeting established financial performance criteria. 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, 2021, 2020, and 2019 and changes during the years
ended December 31, 2021, 2020, and 2019 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
2021
2020
2019
3,337,545
3,362,456
3,254,553
141,515
(19,697)
3,459,363
122,759
8,693
(33,604)
3,337,545
125,064
119,122
(11,219)
3,362,456
106,780
$
$
8,497,054 $
10,895,459 $
12,892,249
9,214,531 $
734,315 $
11,131,181
The fair value of restricted stock that vested during the years ended December 31, 2021, 2020, and 2019 was $11.3
million, $12.5 million and $12.1 million, respectively. As of December 31, 2021, there was $6.9 million of total unrecognized
compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.8 years.
We granted LTIP Units, which include bonus, time-based and performance-based awards, with a fair value of $55.0
million and $37.0 million during the years ended December 31, 2021 and 2020, respectively. The grant date fair value of the
LTIP Unit awards was calculated in accordance with ASC 718. A third-party consultant determined that the fair value of the
LTIP Units has a discount to 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
December 31, 2021, there was $46.6 million of total unrecognized compensation expense related to the time-based and
performance-based awards, which is expected to be recognized over a weighted average period of 1.7 years.
During the years ended December 31, 2021, 2020, and 2019, we recorded compensation expense related to bonus, time-
based and performance-based awards of $41.9 million, $29.4 million, and $22.2 million, respectively.
For the years ended December 31, 2021, 2020, and 2019, $2.1 million, $2.2 million, and $2.1 million, respectively, was
capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and
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, 2021, 24,426 phantom stock units and 12,312 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, 2021 related
to the Deferred Compensation Plan. As of December 31, 2021, there were 165,201 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
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79
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 2021, 2.0 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. There were no options granted during the years ended December 31, 2021, 2020,
and 2019.
A summary of the status of the Company's stock options as of December 31, 2021, 2020, and 2019 and changes during
the years ended December 31, 2021, 2020, and 2019 are as follows:
2021
2020
2019
Options
Outstanding
Options
Outstanding
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Exercise
Price
Weighted
Average
Exercise
Price
Balance at beginning of year
761,686 $
105.76
977,745 $
108.57
1,071,977 $
109.82
Exercised
Lapsed or canceled
Balance at end of year
(11,314)
(356,283)
72.30
112.56
—
—
—
—
(216,059)
118.49
(94,232)
122.84
394,089 $
100.56
761,686 $
105.76
977,745 $
108.57
Options exercisable at end of year
394,089 $
100.56
760,743 $
105.76
862,593 $
107.86
The remaining weighted average contractual life of the options outstanding was 2.3 years and the remaining weighted
average contractual life of the options exercisable was 2.3 years.
During the years ended December 31, 2021, 2020, and 2019, we recognized compensation expense for these options of
$0.0 million, $0.0 million, and $2.5 million, respectively. As of December 31, 2021, there was no unrecognized compensation
cost related to unvested stock options.
Restricted Shares
Shares are granted to certain employees, including our executives, and vesting occurs upon the completion of a service
period or our meeting established financial performance criteria. 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, 2021, 2020, and 2019 and changes during the years
ended December 31, 2021, 2020, and 2019 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
2021
2020
2019
3,337,545
3,362,456
3,254,553
141,515
(19,697)
3,459,363
122,759
8,693
(33,604)
3,337,545
125,064
119,122
(11,219)
3,362,456
106,780
$
$
8,497,054 $
10,895,459 $
12,892,249
9,214,531 $
734,315 $
11,131,181
The fair value of restricted stock that vested during the years ended December 31, 2021, 2020, and 2019 was $11.3
million, $12.5 million and $12.1 million, respectively. As of December 31, 2021, there was $6.9 million of total unrecognized
compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.8 years.
We granted LTIP Units, which include bonus, time-based and performance-based awards, with a fair value of $55.0
million and $37.0 million during the years ended December 31, 2021 and 2020, respectively. The grant date fair value of the
LTIP Unit awards was calculated in accordance with ASC 718. A third-party consultant determined that the fair value of the
LTIP Units has a discount to 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
December 31, 2021, there was $46.6 million of total unrecognized compensation expense related to the time-based and
performance-based awards, which is expected to be recognized over a weighted average period of 1.7 years.
During the years ended December 31, 2021, 2020, and 2019, we recorded compensation expense related to bonus, time-
based and performance-based awards of $41.9 million, $29.4 million, and $22.2 million, respectively.
For the years ended December 31, 2021, 2020, and 2019, $2.1 million, $2.2 million, and $2.1 million, respectively, was
capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and
stock options.
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, 2021, 24,426 phantom stock units and 12,312 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, 2021 related
to the Deferred Compensation Plan. As of December 31, 2021, there were 165,201 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Employee Stock Purchase Plan
In 2007, the Company's Board of Directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to provide 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, 2021, 172,421 shares of our common stock had been issued under the ESPP.
15. Accumulated Other Comprehensive Loss
The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of
December 31, 2021, 2020 and 2019 (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, 2018
$
9,716
$
4,299 $
Other comprehensive (loss) income before reclassifications
(32,723)
(11,956)
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2019
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2020
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
227
(22,780)
(48,532)
13,897
(57,415)
14,908
(325)
(7,982)
(7,573)
4,702
(10,853)
(18,015)
16,626
6,874
1,093 $
1,184
—
2,277
(1,256)
—
1,021
96
—
Balance at December 31, 2021
$
(25,881) $
(21,994) $
1,117 $
15,108
(43,495)
(98)
(28,485)
(57,361)
18,599
(67,247)
(3,011)
23,500
(46,758)
(1)
(2)
Amount reclassified from accumulated other comprehensive loss is included in interest expense in the respective consolidated statements of operations.
As of December 31, 2021 and 2020, the deferred net gains from these terminated hedges, which is included in accumulated other comprehensive loss
relating to net unrealized gain (loss) on derivative instruments, was $(0.6) million and $(0.5) million, respectively.
Amount reclassified from accumulated other comprehensive loss is included in equity in net loss 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 certain of 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 certain 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 as of December 31, 2021 and 2020 (in thousands):
December 31, 2021
Total
Level 1
Level 2
Level 3
$
$
$
$
$
$
Assets:
assets)
Liabilities:
liabilities)
Assets:
assets)
Liabilities:
liabilities)
—
—
—
—
—
—
Marketable securities available-for-sale
24,146
$
—
$
24,146
$
Interest rate cap and swap agreements (included in Other
1,896
$
—
$
1,896
$
Interest rate cap and swap agreements (included in Other
29,912
$
—
$
29,912
$
December 31, 2020
Total
Level 1
Level 2
Level 3
Marketable securities available-for-sale
28,570
$
—
$
28,570
$
Interest rate cap and swap agreements (included in Other
28
$
—
$
28
$
Interest rate cap and swap agreements (included in Other
61,217
$
—
$
61,217
$
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 September 2021, the Company was the successful bidder at the foreclosure of 690 Madison Avenue, at which time the
company, at which time the Company's outstanding principal and accrued interest balance were credited to our equity
investment in the property as it previously served as collateral for a debt and preferred equity investment. We recorded the
assets acquired and liabilities assumed at fair value. 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.
In July 2021, the Company sold a 49% interest in its 220 East 42nd Street investment, which resulted in the Company no
longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of the 51.0% interest we
retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of $206.8 million
during the year ended December 31, 2021. The fair value of our investment was determined by the terms of the joint venture
agreement.
In January 2021, pursuant to the partnership documents of our 885 Third Ave investments, certain participating rights of
the common member expired. As a result, it was determined that this investment is a VIE in which we are the primary
beneficiary, and the investment was consolidated in our financial statements. Upon consolidating the entity, the assets and
liabilities of the entity were recorded at fair value. 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.
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80
81
Employee Stock Purchase Plan
In 2007, the Company's Board of Directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to provide 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
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, 2021, 172,421 shares of our common stock had been issued under the ESPP.
15. Accumulated Other Comprehensive Loss
December 31, 2021, 2020 and 2019 (in thousands):
The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of
Balance at December 31, 2018
$
9,716
$
4,299 $
Other comprehensive (loss) income before reclassifications
(32,723)
(11,956)
Total
1,093 $
1,184
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
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2019
Other comprehensive loss before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Balance at December 31, 2020
227
(22,780)
(48,532)
13,897
(57,415)
14,908
(325)
(7,982)
(7,573)
4,702
(10,853)
(18,015)
—
2,277
(1,256)
—
1,021
96
—
15,108
(43,495)
(98)
(28,485)
(57,361)
18,599
(67,247)
(3,011)
23,500
(46,758)
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
16,626
6,874
Balance at December 31, 2021
$
(25,881) $
(21,994) $
1,117 $
(1)
Amount reclassified from accumulated other comprehensive loss is included in interest expense in the respective consolidated statements of operations.
As of December 31, 2021 and 2020, the deferred net gains from these terminated hedges, which is included in accumulated other comprehensive loss
relating to net unrealized gain (loss) on derivative instruments, was $(0.6) million and $(0.5) million, respectively.
(2)
Amount reclassified from accumulated other comprehensive loss is included in equity in net loss 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 certain of 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 certain 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
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000
basis by their levels in the fair value hierarchy as of December 31, 2021 and 2020 (in thousands):
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
Assets:
Marketable securities available-for-sale
Interest rate cap and swap agreements (included in Other
assets)
Liabilities:
Interest rate cap and swap agreements (included in Other
liabilities)
Assets:
Marketable securities available-for-sale
Interest rate cap and swap agreements (included in Other
assets)
Liabilities:
Interest rate cap and swap agreements (included in Other
liabilities)
December 31, 2021
Total
Level 1
Level 2
Level 3
24,146
$
—
$
24,146
$
1,896
$
—
$
1,896
$
29,912
$
—
$
29,912
$
December 31, 2020
Total
Level 1
Level 2
Level 3
28,570
$
—
$
28,570
$
28
$
—
$
28
$
61,217
$
—
$
61,217
$
—
—
—
—
—
—
$
$
$
$
$
$
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 September 2021, the Company was the successful bidder at the foreclosure of 690 Madison Avenue, at which time the
company, at which time the Company's outstanding principal and accrued interest balance were credited to our equity
investment in the property as it previously served as collateral for a debt and preferred equity investment. We recorded the
assets acquired and liabilities assumed at fair value. 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.
In July 2021, the Company sold a 49% interest in its 220 East 42nd Street investment, which resulted in the Company no
longer retaining a controlling interest in the entity, as defined in ASC 810, and the deconsolidation of the 51.0% interest we
retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of $206.8 million
during the year ended December 31, 2021. The fair value of our investment was determined by the terms of the joint venture
agreement.
In January 2021, pursuant to the partnership documents of our 885 Third Ave investments, certain participating rights of
the common member expired. As a result, it was determined that this investment is a VIE in which we are the primary
beneficiary, and the investment was consolidated in our financial statements. Upon consolidating the entity, the assets and
liabilities of the entity were recorded at fair value. 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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.
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, 2021 and
December 31, 2020 (in thousands):
December 31, 2021
December 31, 2020
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Debt and preferred equity investments
Fixed rate debt
Variable rate debt
$
$
$
1,088,723
(2)
$
1,076,542
(2)
3,274,324 $
3,336,463 $
3,135,572 $
801,051
800,672
1,827,677
4,075,375 $
4,137,135 $
4,963,249 $
3,237,075
1,822,740
5,059,815
(1)
(2)
Amounts exclude net deferred financing costs.
As of December 31, 2021, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion. As of
December 31, 2020, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion.
Disclosures regarding the fair value of financial instruments was based on pertinent information available to us as of
December 31, 2021 and 2020. 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 Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
operations.
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, collars 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 as of December 31, 2021 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
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Balance Sheet
Location
Fair
Value
$
85,000
4.000 %
March 2021
March 2022 Other Assets
$
111,869
100,000
400,000
100,000
200,000
150,000
150,000
200,000
3.500 % November 2021
November 2022 Other Assets
0.212 %
0.184 %
January 2021
January 2023 Other Assets
January 2022
February 2023 Other Assets
1.161 % November 2021
July 2023 Other Liabilities
1.131 % November 2021
July 2023 Other Liabilities
2.696 % December 2021
January 2024 Other Liabilities
2.721 % December 2021
January 2026 Other Liabilities
2.740 % December 2021
January 2026 Other Liabilities
(12,814)
—
1
376
1,519
(733)
(1,371)
(5,625)
(9,369)
$
(28,016)
During the years ended December 31, 2021, 2020, and 2019, we recorded losses of $0.0 million, $0.1 million, and $0.1
million, respectively, on the changes in the fair value, which is included in interest expense in the consolidated statements of
The Company frequently has agreements with each of its derivative counterparties that contain a provision where if the
Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
As of December 31, 2021, 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 $31.3 million. As of December 31, 2021, the Company
was not required to post 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 $31.8 million as of December 31, 2021.
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 $11.5 million of the current balance
held in accumulated other comprehensive loss will be reclassified in interest expense and $3.8 million of the portion related to
our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net loss 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, 2021, 2020, and 2019, respectively (in thousands):
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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.
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, 2021 and
December 31, 2020 (in thousands):
December 31, 2021
December 31, 2020
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
$
$
$
Debt and preferred equity investments
1,088,723
(2)
$
1,076,542
(2)
Fixed rate debt
Variable rate debt
3,274,324 $
3,336,463 $
3,135,572 $
801,051
800,672
1,827,677
4,075,375 $
4,137,135 $
4,963,249 $
3,237,075
1,822,740
5,059,815
Amounts exclude net deferred financing costs.
(1)
(2)
As of December 31, 2021, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion. As of
December 31, 2020, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion.
Disclosures regarding the fair value of financial instruments was based on pertinent information available to us as of
December 31, 2021 and 2020. 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, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
In December 2020, the Company determined there were indicators of impairment in two of its retail assets, 106 Spring
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, collars 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 as of December 31, 2021 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).
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Balance Sheet
Location
Fair
Value
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
$
85,000
4.000 %
March 2021
March 2022 Other Assets
$
111,869
100,000
400,000
100,000
200,000
150,000
150,000
200,000
3.500 % November 2021
November 2022 Other Assets
0.212 %
0.184 %
January 2021
January 2023 Other Assets
January 2022
February 2023 Other Assets
1.161 % November 2021
July 2023 Other Liabilities
1.131 % November 2021
July 2023 Other Liabilities
2.696 % December 2021
January 2024 Other Liabilities
2.721 % December 2021
January 2026 Other Liabilities
2.740 % December 2021
January 2026 Other Liabilities
(12,814)
$
(28,016)
—
1
376
1,519
(733)
(1,371)
(5,625)
(9,369)
During the years ended December 31, 2021, 2020, and 2019, we recorded losses of $0.0 million, $0.1 million, and $0.1
million, respectively, on the changes in the fair value, which is included in interest expense in the consolidated statements of
operations.
The Company frequently has agreements with each of its derivative counterparties that contain a provision where if the
Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
As of December 31, 2021, 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 $31.3 million. As of December 31, 2021, the Company
was not required to post 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 $31.8 million as of December 31, 2021.
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 $11.5 million of the current balance
held in accumulated other comprehensive loss will be reclassified in interest expense and $3.8 million of the portion related to
our share of joint venture accumulated other comprehensive loss will be reclassified into equity in net loss 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, 2021, 2020, and 2019, 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, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Amount of Loss
Recognized in
Other Comprehensive Loss
Year Ended
December 31,
Derivative
2021
2020
2019
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,
2021
2020
2019
Interest Rate Swaps/Caps
Share of unconsolidated
joint ventures' derivative
instruments
$ 15,643 $ (51,244) $ (33,907) Interest expense
$ (17,602) $ (14,569) $
(261)
(19,400)
(7,977)
(10,322)
$
(3,757) $ (59,221) $ (44,229)
Equity in net (loss) income
from unconsolidated joint
ventures
(7,582)
(4,911)
$ (25,184) $ (19,480) $
256
(5)
The following table summarizes the notional value at inception and fair value of our joint ventures' derivative financial
instruments as of December 31, 2021 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).
Notional
Value
Strike Rate
Effective Date
Expiration Date
Classification
Fair Value
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
$
220,000
4.000 %
February 2020
February 2022
$
1,075,000
2.850 % September 2021
September 2022
125,000
23,000
510,000
2.850 % September 2021
September 2022
4.750 %
January 2021
January 2023
3.000 % December 2021
June 2023
1,250,000
1.250 % November 2020
October 2024
Interest Rate Swap
177,000
1.669 %
March 2016
February 2026
—
5
1
1
155
8,657
(3,560)
$
5,259
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,
2021 are as follows (in thousands):
Thereafter
Total minimum lease payments
Amount representing interest
Investment in sales-type leases (1)
2022
2023
2024
2025
2026
Thereafter
$
532,046
485,299
443,632
415,241
374,661
1,655,647
$
3,906,526
(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, 2021 and 2020 were as
follows (in thousands):
Loss recognized at commencement, net (1)
Interest income (2)
Total gain (loss) recognized on sales-type leases
These amounts are included in Gain on sale of real estate, net and Depreciable real estate reserves and impairments in our consolidated statements of
(1)
(2)
operations.
These amounts are included in Other income in our consolidated statements of operations.
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The components of lease income from operating leases during the years ended December 31, 2021 and 2020 were as
Amortization of acquired above and below-market leases
(1)
Amounts include $229.2 million and $237.9 million of sublease income for the years ended December 31, 2021 and 2020, respectively.
The table below summarizes our investment in sales-type leases as of December 31, 2021:
Reflects exercise of all available renewal options.
See Note 6, "Investments in Unconsolidated Joint Ventures."
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.
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, 2021 are as follows (in thousands):
follows (in thousands):
Fixed lease payments
Variable lease payments
Total lease payments
Total rental revenue
Property
15 Beekman (2)
(1)
(2)
2022
2023
2024
2025
2026
Twelve Months Ended
December 31,
2021
2020
$
$
$
600,474 $
702,482
73,542
96,040
674,016 $
798,522
4,160
5,901
678,176 $
804,423
Year of Current
Expiration
Year of Final
Expiration (1)
2089
2089
Sales-type leases
3,087
3,133
3,180
3,228
3,276
203,494
219,398
(116,376)
103,022
$
$
$
Twelve Months Ended
December 31,
2021
2020
$
$
— $
(6,237)
4,422
1,817
4,422 $
(4,420)
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
2021
2020
2019
Income
2021
2020
2019
Interest Rate Swaps/Caps
$ 15,643 $ (51,244) $ (33,907) Interest expense
$ (17,602) $ (14,569) $
(261)
Location of (Loss) Gain
Reclassified from
Accumulated Other
Comprehensive Loss into
Equity in net (loss) income
from unconsolidated joint
Share of unconsolidated
joint ventures' derivative
instruments
The following table summarizes the notional value at inception and fair value of our joint ventures' derivative financial
instruments as of December 31, 2021 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).
Notional
Value
Strike Rate
Effective Date
Expiration Date
Classification
Fair Value
$
220,000
4.000 %
February 2020
February 2022
$
1,075,000
2.850 % September 2021
September 2022
125,000
23,000
510,000
2.850 % September 2021
September 2022
4.750 %
January 2021
January 2023
3.000 % December 2021
June 2023
1,250,000
1.250 % November 2020
October 2024
—
5
1
1
155
8,657
(3,560)
$
5,259
Interest Rate Swap
177,000
1.669 %
March 2016
February 2026
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,
2021 are as follows (in thousands):
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
18. Lease Income
2022
2023
2024
2025
2026
Thereafter
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
The components of lease income from operating leases during the years ended December 31, 2021 and 2020 were as
(19,400)
(7,977)
(10,322)
ventures
$
(3,757) $ (59,221) $ (44,229)
(7,582)
(4,911)
$ (25,184) $ (19,480) $
256
(5)
Amortization of acquired above and below-market leases
Total rental revenue
follows (in thousands):
Fixed lease payments
Variable lease payments
Total lease payments
Twelve Months Ended
December 31,
2021
2020
$
$
$
600,474 $
702,482
73,542
96,040
674,016 $
798,522
4,160
5,901
678,176 $
804,423
(1)
Amounts include $229.2 million and $237.9 million of sublease income for the years ended December 31, 2021 and 2020, respectively.
The table below summarizes our investment in sales-type leases as of December 31, 2021:
Property
15 Beekman (2)
Year of Current
Expiration
Year of Final
Expiration (1)
2089
2089
(1)
(2)
Reflects exercise of all available renewal options.
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, 2021 are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Amount representing interest
Investment in sales-type leases (1)
Sales-type leases
3,087
3,133
3,180
3,228
3,276
203,494
219,398
(116,376)
103,022
$
$
$
$
532,046
485,299
443,632
415,241
374,661
1,655,647
$
3,906,526
(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, 2021 and 2020 were as
follows (in thousands):
Loss recognized at commencement, net (1)
Interest income (2)
Total gain (loss) recognized on sales-type leases
Twelve Months Ended
December 31,
2021
2020
$
$
— $
(6,237)
4,422
1,817
4,422 $
(4,420)
(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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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,
2019, September 27, 2020, and September 28, 2021, the actuary certified that for the plan years beginning July 1, 2019, July 1,
2020, and July 1, 2021, 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, 2021. As of the date of this report, information was not yet available for the Pension Plan year ended June 30,
2021. For the Pension Plan years ended June 30, 2020 and 2019, the plan received contributions from employers totaling
$291.3 million and $290.1 million, respectively. 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. As of the date of
this report, information was not yet available for the Health Plan year ended June 30, 2021. For the Health Plan years ended,
June 30, 2020 and 2019, the plan received contributions from employers totaling $1.6 billion and $1.5 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, 2021, 2020 and 2019 are included
in the table below (in thousands):
Benefit Plan
Pension Plan
Health Plan
Other plans
Total plan contributions
401(K) Plan
2021
2020
2019
$
$
1,994 $
2,480 $
6,333
849
7,688
929
3,103
9,949
1,108
9,176 $
11,097 $
14,160
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 2021, 2020 and 2019, a matching contribution equal to 100% of the first 4% of annual
compensation was made. For the years ended December 31, 2021, December 31, 2020, and December 31, 2019 we made
matching contributions of $1.5 million, $1.7 million, and $1.6 million, respectively.
20. Commitments and Contingencies
Legal Proceedings
As of December 31, 2021, 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.
In September 2021, the Company acquired the fee position in 1591-1597 Broadway. A third party has asserted ownership
rights to the fee, which the Company is contesting. See Note 3, "Property Acquisitions."
On October 31, 2021, HNA, through an affiliated entity, filed for Chapter 11 bankruptcy protection on account of its
investment in 245 Park Avenue, together with another asset in Chicago. The Company contested the filing, on the basis that the
filing was done in bad faith and in violation of HNA's agreements with the Company, and is currently appealing the Bankruptcy
court’s ruling upholding the filing by HNA. See Note 5, "Debt and Preferred Equity Investments."
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.
Environmental Matters
Employment Agreements
We have entered into employment agreements with certain executives, which expire between December 2023 and
January 2025. The minimum cash-based compensation, including base salary and guaranteed bonus payments, associated with
these employment agreements total $3.4 million for 2022.
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 development projects. 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 $2.9 million as of December 31, 2021 and 2020, respectively. Ticonderoga
had no loss reserves as of December 31, 2021 and 2020.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
19. Benefit Plans
20. Commitments and Contingencies
The building employees are covered by multi-employer defined benefit pension plans and post-retirement health and
Legal Proceedings
from July 1 to June 30. Employers contribute to the Pension Plan at a fixed rate on behalf of each covered employee. Separate
rights to the fee, which the Company is contesting. See Note 3, "Property Acquisitions."
As of December 31, 2021, 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.
In September 2021, the Company acquired the fee position in 1591-1597 Broadway. A third party has asserted ownership
On October 31, 2021, HNA, through an affiliated entity, filed for Chapter 11 bankruptcy protection on account of its
investment in 245 Park Avenue, together with another asset in Chicago. The Company contested the filing, on the basis that the
filing was done in bad faith and in violation of HNA's agreements with the Company, and is currently appealing the Bankruptcy
court’s ruling upholding the filing by HNA. See Note 5, "Debt and Preferred Equity Investments."
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 2023 and
January 2025. The minimum cash-based compensation, including base salary and guaranteed bonus payments, associated with
these employment agreements total $3.4 million for 2022.
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 development projects. 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 $2.9 million as of December 31, 2021 and 2020, respectively. Ticonderoga
had no loss reserves as of December 31, 2021 and 2020.
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
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,
2019, September 27, 2020, and September 28, 2021, the actuary certified that for the plan years beginning July 1, 2019, July 1,
2020, and July 1, 2021, 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, 2021. As of the date of this report, information was not yet available for the Pension Plan year ended June 30,
2021. For the Pension Plan years ended June 30, 2020 and 2019, the plan received contributions from employers totaling
$291.3 million and $290.1 million, respectively. 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. As of the date of
this report, information was not yet available for the Health Plan year ended June 30, 2021. For the Health Plan years ended,
June 30, 2020 and 2019, the plan received contributions from employers totaling $1.6 billion and $1.5 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, 2021, 2020 and 2019 are included
in the table below (in thousands):
Benefit Plan
Pension Plan
Health Plan
Other plans
Total plan contributions
401(K) Plan
2021
2020
2019
$
$
1,994 $
2,480 $
6,333
849
7,688
929
3,103
9,949
1,108
9,176 $
11,097 $
14,160
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 2021, 2020 and 2019, a matching contribution equal to 100% of the first 4% of annual
compensation was made. For the years ended December 31, 2021, December 31, 2020, and December 31, 2019 we made
matching contributions of $1.5 million, $1.7 million, and $1.6 million, respectively.
86
87
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The following table provides lease cost information for the Company's operating leases for the twelve months ended
December 31, 2021 and 2020 (in thousands):
(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
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,
2021
2020
$
$
30,270 $
(3,716)
26,554 $
32,169
(3,126)
29,043
Twelve Months Ended
December 31,
2021
2020
$
5,448 $
—
5,448
660
$
6,108 $
8,091
(2,378)
5,713
1,200
6,913
(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, 2021, the weighted-average discount rate used to calculate the lease liabilities was 4.45%. As of
December 31, 2021, the weighted-average remaining lease term was 32 years, inclusive of purchase options expected to be
exercised.
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Lease Arrangements
We are a tenant under leases for certain properties, including ground leases. 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 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. Additionally, certain of our leases are subject to percentage rent arrangements based on thresholds established
in the lease agreement, such as percentage of sales at the property. Percentage rents will be recognized in the periods in which
they are incurred.
The table below summarizes our current lease arrangements as of December 31, 2021:
December 31, 2021 and 2020 (in thousands):
Property (1)
625 Madison Avenue
711 Third Avenue (3)
1185 Avenue of the Americas
SL Green Headquarters at One Vanderbilt (4)
420 Lexington Avenue
SUMMIT One Vanderbilt
885 Third Avenue
1080 Amsterdam Avenue (5)
15 Beekman (6)(7)
Year of Current
Expiration
Year of Final
Expiration (2)
2022
2033
2043
2043
2050
2058
2080
2111
2119
2054
2083
2043
2048
2080
2070
2080
2111
2119
(1)
(2)
(3)
(4)
(5)
(6)
(7)
All leases are classified as operating leases unless otherwise specified.
Reflects exercise of all available extension options.
The Company owns 50% of the fee interest.
In March 2021, the Company commenced its lease for its corporate headquarters at One Vanderbilt. See note 10, "Related Party Transactions."
A portion of the lease is classified as a financing lease, which was classified as held for sale as of December 31, 2021.
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.
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, 2021 (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Amount representing interest
Amount discounted using incremental borrowing rate
Total lease liabilities excluding liabilities related to assets held for sale
Leases reclassified to liabilities related to assets held for sale
Total lease liabilities
Financing leases
Operating leases (1)
$
$
$
$
3,523 $
3,570
3,641
3,810
3,858
256,691
275,093 $
(149,563)
—
125,530 $
(22,616)
102,914 $
36,776
48,680
54,545
54,772
54,911
1,395,533
1,645,217
—
(786,280)
858,937
(7,567)
851,370
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89
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
Lease Arrangements
We are a tenant under leases for certain properties, including ground leases. 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 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. Additionally, certain of our leases are subject to percentage rent arrangements based on thresholds established
in the lease agreement, such as percentage of sales at the property. Percentage rents will be recognized in the periods in which
The following table provides lease cost information for the Company's operating leases for the twelve months ended
December 31, 2021 and 2020 (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,
2021
2020
$
$
30,270 $
(3,716)
26,554 $
32,169
(3,126)
29,043
(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
The table below summarizes our current lease arrangements as of December 31, 2021:
December 31, 2021 and 2020 (in thousands):
Year of Current
Expiration
Year of Final
Expiration (2)
Financing Lease Costs
Twelve Months Ended
December 31,
2021
2020
Interest on financing leases before capitalized interest
$
5,448 $
Interest on financing leases capitalized
Interest on financing leases, net (1)
Amortization of right-of-use assets (2)
Financing lease costs, net
—
5,448
660
$
6,108 $
8,091
(2,378)
5,713
1,200
6,913
(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, 2021, the weighted-average discount rate used to calculate the lease liabilities was 4.45%. As of
December 31, 2021, the weighted-average remaining lease term was 32 years, inclusive of purchase options expected to be
exercised.
they are incurred.
Property (1)
625 Madison Avenue
711 Third Avenue (3)
1185 Avenue of the Americas
SL Green Headquarters at One Vanderbilt (4)
420 Lexington Avenue
SUMMIT One Vanderbilt
885 Third Avenue
1080 Amsterdam Avenue (5)
15 Beekman (6)(7)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Amount representing interest
Amount discounted using incremental borrowing rate
Total lease liabilities excluding liabilities related to assets held for sale
Leases reclassified to liabilities related to assets held for sale
Total lease liabilities
2022
2033
2043
2043
2050
2058
2080
2111
2119
2054
2083
2043
2048
2080
2070
2080
2111
2119
Financing leases
Operating leases (1)
$
$
$
$
3,523 $
3,570
3,641
3,810
3,858
256,691
275,093 $
(149,563)
—
125,530 $
(22,616)
102,914 $
36,776
48,680
54,545
54,772
54,911
1,395,533
1,645,217
—
(786,280)
858,937
(7,567)
851,370
All leases are classified as operating leases unless otherwise specified.
Reflects exercise of all available extension options.
The Company owns 50% of the fee interest.
In March 2021, the Company commenced its lease for its corporate headquarters at One Vanderbilt. See note 10, "Related Party Transactions."
A portion of the lease is classified as a financing lease, which was classified as held for sale as of December 31, 2021.
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.
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, 2021 (in thousands):
88
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 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, 2021, 2020, and 2019, and selected asset
information as of December 31, 2021 and 2020, regarding our operating segments are as follows (in thousands):
Total revenues
Years ended:
December 31, 2021
December 31, 2020
December 31, 2019
Net Income
Years ended:
December 31, 2021
December 31, 2020
December 31, 2019
Total assets
As of:
December 31, 2021
December 31, 2020
Real Estate
Segment
Debt and Preferred
Equity Segment
Total Company
$
763,651 $
80,340 $
932,581
1,043,405
120,163
195,590
$
412,393 $
68,239 $
354,353
158,972
60,405
132,515
843,991
1,052,744
1,238,995
480,632
414,758
291,487
$
9,974,140 $
1,092,489 $
10,579,899
1,127,668
11,066,629
11,707,567
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 between periods. In addition, we base performance on the individual segments prior to allocating
marketing, general and administrative expenses. For the years ended, December 31, 2021, 2020, and 2019 marketing, general
and administrative expenses totaled $94.9 million, $91.8 million, and $100.9 million respectively. All other expenses, except
interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2021
(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
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
200,212
34,994
6,326
34,994
190,258
225,252
125 Park Avenue
19 East 65th Street
304 Park Avenue
760 Madison
Avenue (6)
719 Seventh
Avenue (7)
110 Greene Street
7 Dey / 185
Broadway (8)
120,900
8,603
54,489
50,000
—
41,180
45,120
198,169
45,540
885 Third Avenue
—
138,444
690 Madison
1591-1597
Broadway (9)
Other (10)
Total
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Life on
Which
Various
Various
Various
Various
Various
1927
1955
1971
1988
1958
3/1998
5/1998
1/1999
10/2003
7/2004
—
—
—
—
—
—
—
—
—
—
—
—
$
288,660
$
—
$
333,499
$
$
212,293
$
—
$
545,792
$
545,792
$
183,070
19,844
18,846
—
115,769
140,946
88,276
28,873
69,839
19,844
185,608
205,452
2,376
6,421
18,846
28,873
143,322
162,168
94,697
123,570
71,105
86,730
38,024
51,093
251,523
20,428
51,093
271,951
323,044
114,853
—
291,319
62,282
—
353,601
353,601
145,749
1956
10/2004
Various
450,000
78,282
452,631
(14,169)
78,282
438,462
516,744
188,678
1956
12/2004
Various
52,882
16,869
107,185
62,554
16,869
169,739
186,608
19,879
1925
6/2006
Various
114,077
550,819
5,205
114,077
556,024
670,101
221,222
1970
1/2007
Various
—
791,106
127,030
—
918,136
918,136
348,065
1969
1/2007
Various
90,941
431,517
—
90,941
431,517
522,458
168,295
1966
1/2007
Various
100,000
27,852
161,343
(6,939)
(33,873)
20,913
127,470
148,383
36,923
1973-1984
1/2007
Various
—
1,721
8,417
(1,338)
(6,240)
383
2,177
2,560
284,286
8,314
(2,450)
63,077
281,836
71,391
353,227
4,991
1996/2012
7/2014
Various
183,932
270,598
2,074
90,643
46,232
228,393
27,865
244,040
15,899
120,900
286,497
407,397
109,858
—
8,603
2,074
10,677
—
5,139
54,489
95,782
150,271
26,627
(4,725)
41,180
41,507
82,687
2,578
45,120
230,971
276,091
177,184
45,540
15,396
138,445
205,049
259,438
250,589
397,883
2007
1959
1923
1929
1930
1927
1910
1921
1986
1879
1/2007
1/2010
10/2010
01/2012
6/2012
7/2014
7/2015
8/2015
07/2020
09/2021
Various
Various
Various
Various
Various
Various
Various
Various
Various
Various
516
65,736
3,356
42,909
419
7,885
409
—
10,900
60,000
13,820
51,732
—
13,820
51,732
65,552
—
—
123,919
1,734
—
16,224
—
123,919
610,787
1,734
—
627,011
123,919
628,745
1987
09/2021
Various
$
1,399,923
$ 1,332,556
$
4,894,397
$ 18,146
$
1,405,807
$ 1,350,701 $
6,300,206
$ 7,650,907
$ 1,896,199
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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 amounts attributable to the property at 762 Madison Avenue, which is part of this development project.
Includes right of use lease assets.
Property located in Connecticut.
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 7 Dey / 185 Broadway project.
A third party has asserted ownership rights to the fee, which the Company is contesting.
Other includes tenant improvements of eEmerge, capitalized interest and corporate improvements.
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90
91
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2021
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, 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, 2021, 2020, and 2019, and selected asset
information as of December 31, 2021 and 2020, regarding our operating segments are as follows (in thousands):
Total revenues
Years ended:
December 31, 2021
December 31, 2020
December 31, 2019
Net Income
Years ended:
December 31, 2021
December 31, 2020
December 31, 2019
Total assets
As of:
December 31, 2021
December 31, 2020
Real Estate
Segment
Debt and Preferred
Equity Segment
Total Company
$
763,651 $
80,340 $
932,581
1,043,405
120,163
195,590
$
412,393 $
68,239 $
354,353
158,972
60,405
132,515
843,991
1,052,744
1,238,995
480,632
414,758
291,487
$
9,974,140 $
1,092,489 $
10,579,899
1,127,668
11,066,629
11,707,567
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 between periods. In addition, we base performance on the individual segments prior to allocating
marketing, general and administrative expenses. For the years ended, December 31, 2021, 2020, and 2019 marketing, general
and administrative expenses totaled $94.9 million, $91.8 million, and $100.9 million respectively. All other expenses, except
interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2021
(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
$
288,660
$
—
$
333,499
$
19,844
18,846
—
115,769
140,946
88,276
28,873
51,093
251,523
—
291,319
$
212,293
$
—
$
545,792
$
545,792
$
183,070
69,839
19,844
185,608
205,452
2,376
6,421
18,846
28,873
143,322
162,168
94,697
123,570
71,105
86,730
38,024
20,428
51,093
271,951
323,044
114,853
1927
1955
1971
1988
1958
3/1998
5/1998
1/1999
10/2003
7/2004
450,000
78,282
452,631
52,882
16,869
107,185
—
—
—
114,077
550,819
—
791,106
90,941
431,517
62,282
—
353,601
353,601
145,749
1956
10/2004
Various
(14,169)
78,282
438,462
516,744
188,678
1956
12/2004
Various
62,554
16,869
169,739
186,608
19,879
1925
6/2006
Various
5,205
114,077
556,024
670,101
221,222
1970
1/2007
Various
127,030
—
918,136
918,136
348,065
1969
1/2007
Various
—
90,941
431,517
522,458
168,295
1966
1/2007
Various
—
—
—
—
—
—
—
—
—
—
Life on
Which
Depreciation is
Computed
Various
Various
Various
Various
Various
100,000
27,852
161,343
(6,939)
(33,873)
20,913
127,470
148,383
36,923
1973-1984
1/2007
Various
100 Church Street
200,212
34,994
6,326
34,994
190,258
225,252
—
1,721
8,417
(1,338)
(6,240)
383
2,177
2,560
120,900
8,603
54,489
183,932
270,598
2,074
90,643
—
—
—
—
15,899
120,900
286,497
407,397
109,858
—
8,603
2,074
10,677
—
5,139
54,489
95,782
150,271
26,627
516
65,736
2007
1959
1923
1929
1930
1/2007
1/2010
10/2010
01/2012
6/2012
Various
Various
Various
Various
Various
284,286
8,314
(2,450)
63,077
281,836
71,391
353,227
4,991
1996/2012
7/2014
Various
885 Third Avenue
—
138,444
50,000
—
41,180
45,120
198,169
45,540
46,232
228,393
27,865
244,040
60,000
13,820
51,732
—
—
123,919
1,734
—
16,224
—
—
—
—
—
—
—
(4,725)
41,180
41,507
82,687
2,578
45,120
230,971
276,091
177,184
45,540
15,396
138,445
205,049
259,438
250,589
397,883
—
13,820
51,732
65,552
—
123,919
610,787
1,734
—
627,011
123,919
628,745
3,356
42,909
419
7,885
409
—
10,900
1927
1910
1921
1986
1879
7/2014
7/2015
8/2015
07/2020
09/2021
Various
Various
Various
Various
Various
1987
09/2021
Various
$
1,399,923
$ 1,332,556
$
4,894,397
$ 18,146
$
1,405,807
$ 1,350,701 $
6,300,206
$ 7,650,907
$ 1,896,199
420 Lexington
Ave
711 Third Avenue
555 W. 57th 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
19 East 65th Street
304 Park Avenue
760 Madison
Avenue (6)
719 Seventh
Avenue (7)
110 Greene Street
7 Dey / 185
Broadway (8)
690 Madison
1591-1597
Broadway (9)
Other (10)
Total
—
—
—
—
—
—
—
—
—
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
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.
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 7 Dey / 185 Broadway project.
A third party has asserted ownership rights to the fee, which the Company is contesting.
Other includes tenant improvements of eEmerge, capitalized interest and corporate improvements.
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Schedule III - Real Estate and Accumulated Depreciation
December 31, 2021
(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, 2021, 2020 and 2019 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
2021
2020
2019
$
7,355,079 $
8,784,567 $
8,513,935
124,103
296,876
178,635
481,327
(125,151)
(2,089,450)
—
251,674
18,958
$
7,650,907 $
7,355,079 $
8,784,567
The aggregate cost of land, buildings and improvements, before depreciation, for Federal income tax purposes as of
December 31, 2021 was $8.8 billion (unaudited).
The changes in accumulated depreciation, exclusive of amounts relating to equipment, autos, and furniture and fixtures,
for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):
We have audited the accompanying consolidated balance sheets of SL Green Realty Corp. (the Company) as of December 31,
2021 and 2020, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2021, 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, 2021 and 2020, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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, 2021, 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 18, 2022 expressed an unqualified opinion thereon.
Balance at beginning of year
Depreciation for year
Retirements/disposals/deconsolidation
Balance at end of year
2021
2020
2019
$
1,956,077 $
2,060,560 $
2,099,137
174,219
(234,097)
270,843
(375,326)
222,867
(261,444)
$
1,896,199 $
1,956,077 $
2,060,560
Adoption of ASU No. 2016-13
Basis for Opinion
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.
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 Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates 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 matter 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 matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
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Schedule III - Real Estate and Accumulated Depreciation
December 31, 2021
(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, 2021, 2020 and 2019 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
2021
2020
2019
$
7,355,079 $
8,784,567 $
8,513,935
124,103
296,876
178,635
481,327
(125,151)
(2,089,450)
—
251,674
18,958
$
7,650,907 $
7,355,079 $
8,784,567
2021
2020
2019
$
1,956,077 $
2,060,560 $
2,099,137
174,219
(234,097)
270,843
(375,326)
222,867
(261,444)
$
1,896,199 $
1,956,077 $
2,060,560
The aggregate cost of land, buildings and improvements, before depreciation, for Federal income tax purposes as of
December 31, 2021 was $8.8 billion (unaudited).
The changes in accumulated depreciation, exclusive of amounts relating to equipment, autos, and furniture and fixtures,
for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):
We have audited the accompanying consolidated balance sheets of SL Green Realty Corp. (the Company) as of December 31,
2021 and 2020, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2021, 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, 2021 and 2020, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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, 2021, 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 18, 2022 expressed an unqualified opinion thereon.
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 Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates 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 matter 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 matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
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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, 2021,
the Company’s investments in unconsolidated joint ventures was $3.0 billion and noncontrolling interests in
consolidated other partnerships was $13.4 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.
/s/ Ernst & Young LLP
We have served as the Company‘s auditor since 1997.
New York, New York
February 18, 2022
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
We have audited SL Green Realty Corp.'s internal control over financial reporting as of December 31, 2021, 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, 2021, 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 2021 consolidated financial statements of the Company and our report dated February 18, 2022 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 18, 2022
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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, 2021,
the Company’s investments in unconsolidated joint ventures was $3.0 billion and noncontrolling interests in
consolidated other partnerships was $13.4 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.
We have served as the Company‘s auditor since 1997.
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
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
We have audited SL Green Realty Corp.'s internal control over financial reporting as of December 31, 2021, 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, 2021, 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 2021 consolidated financial statements of the Company and our report dated February 18, 2022 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 18, 2022
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95
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Report of Independent Registered Public Accounting Firm
To the Partners of SL Green Operating Partnership, L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SL Green Operating Partnership, L.P. (the Operating
Partnership) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income,
capital and cash flows for each of the three years in the period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2021, 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, 2021, 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 18, 2022 expressed an unqualified opinion thereon.
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 Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates 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 matter 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 matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
the Matter
How We
Addressed the
Matter in Our
Audit
Joint Venture Consolidation Assessment
Description of
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, 2021, the Operating Partnership’s investments in unconsolidated joint ventures was $3.0 billion and
noncontrolling interests in consolidated other partnerships was $13.4 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.
We have served as the Operating Partnership's auditor since 2010.
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
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97
Report of Independent Registered Public Accounting Firm
To the Partners of SL Green Operating Partnership, L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SL Green Operating Partnership, L.P. (the Operating
Partnership) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income,
capital and cash flows for each of the three years in the period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2021, 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, 2021, 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 18, 2022 expressed an unqualified opinion thereon.
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
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 Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates 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 matter 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 matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
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, 2021, the Operating Partnership’s investments in unconsolidated joint ventures was $3.0 billion and
noncontrolling interests in consolidated other partnerships was $13.4 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.
/s/ Ernst & Young LLP
We have served as the Operating Partnership's auditor since 2010.
New York, New York
February 18, 2022
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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, 2021,
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, 2021, 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 2021 consolidated financial statements of the Operating Partnership and our report dated February 18, 2022
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, 2021.
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 18, 2022
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, 2021 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, 2021 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, 2021 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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99
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, 2021,
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, 2021, 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 2021 consolidated financial statements of the Operating Partnership and our report dated February 18, 2022
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 18, 2022
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, 2021 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, 2021.
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, 2021 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, 2021 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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99
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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, 2021 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, 2021.
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, 2021 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, 2021 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 17,
2022, the reported closing sale price per share of common stock on the NYSE was $82.18 and there were 494 holders of record
of our common stock.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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.
As of December 31, 2021, there were 3,781,565 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 17, 2022,
there were 56 holders of record and 68,918,314 common units outstanding, 64,770,730 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 dividends on
its common stock, and the Operating Partnership has adopted a policy of paying regular 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 could 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.
As of December 31, 2021, share repurchases, excluding the redemption of OP Units, executed under the program were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
SECURITIES
Shares repurchased
Average price paid per
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
share
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
During the year ended December 31, 2021, we did not issue any 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, 2020 and 2019, we issued 95,094 and 4,726
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.
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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,
As of December 31, 2021, there were 3,781,565 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 17, 2022,
evaluation and disclosure of information relating to the Operating Partnership that would potentially be subject to disclosure
there were 56 holders of record and 68,918,314 common units outstanding, 64,770,730 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 dividends on
its common stock, and the Operating Partnership has adopted a policy of paying regular 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, 2021 has
ISSUER PURCHASES OF EQUITY SECURITIES
year ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, its internal control over
As of December 31, 2021, share repurchases, excluding the redemption of OP Units, executed under the program were as
In August 2016, our Board of Directors approved a share repurchase program under which we could 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.
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Shares repurchased
Average price paid per
share
Cumulative number of
shares repurchased as
part of the repurchase
plan or programs
7,865,206
9,187,480
4,333,260
8,285,460
4,474,649
$107.81
$102.06
$88.69
$64.30
$75.44
7,865,206
17,052,686
21,385,946
29,671,406
34,146,055
SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
During the year ended December 31, 2021, we did not issue any 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, 2020 and 2019, we issued 95,094 and 4,726
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, 2021 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, 2021.
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 17,
2022, the reported closing sale price per share of common stock on the NYSE was $82.18 and there were 494 holders of record
of our common stock.
On December 2, 2021 our Board of Directors declared an ordinary dividend of $0.3108 per share ($0.3203 per share
reflecting reverse stock split noted below) and a special dividend of $2.4392 per share ($2.5138 per share reflecting reverse
stock split noted below) (together, "the Total Dividend"). The Total Dividend was paid on January 18, 2022 to shareholders of
record at the close of business on December 15, 2021 ("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 21, 2022. On January 10, 2022, 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
1.03060-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.
100
101
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The following table summarizes information, as of December 31, 2021, relating to our equity compensation plans
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
pursuant to which shares of our common stock or other equity securities may be granted from time to time.
Plan category
Equity compensation plans approved by security holders (1)
Equity compensation plans not approved by security
holders
Total
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)
3,944,302 (2) $
100.56 (3)
2,215,410 (4)
Funds From Operations (FFO) Reconciliation:
—
3,944,302
$
—
100.56
—
2,215,410
Net income attributable to SL Green common stockholders
$
434,804 $
356,105
(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) 394,089 shares of common stock issuable upon the exercise of outstanding options (394,089 of which are vested and exercisable), (ii)
165,201 phantom stock units that may be settled in shares of common stock (165,201 of which are vested), (iii) 2,434,492 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 (1,509,546 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.
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, 2021, and 2020 (amounts in thousands,
except per share data).
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
$
481,234 $
562,725
(1)
During the first quarter of 2022, 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 2022, 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 retroactively adjusted 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 2021 reporting periods.
FFO attributable to SL Green common stockholders and unit holders
$
481,234 $
562,725
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
$
380,710 $
455,167
Twelve Months Ended
December 31,
2021
2020
216,869
249,087
23,573
287,417
(32,757)
209,443
(23,794)
2,790
70,769
1,794
72,563
$
$
6.80 $
6.63 $
313,668
205,869
34,956
215,506
2,961
187,522
(60,454)
2,338
75,078
4,039
79,117
7.50
7.11
Twelve Months Ended
December 31,
2021
2020
2,790
11,424
54,175
94,506
12,159
28,350
7,872
2,503
23,523
2,338
11,794
43,199
54,528
23,195
53,730
10,230
610
22,596
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102
103
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)
—
3,944,302
$
—
100.56
—
2,215,410
Equity compensation plans not approved by security
Plan category
holders
Total
(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) 394,089 shares of common stock issuable upon the exercise of outstanding options (394,089 of which are vested and exercisable), (ii)
165,201 phantom stock units that may be settled in shares of common stock (165,201 of which are vested), (iii) 2,434,492 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 (1,509,546 of which are vested).
weighted-average exercise price calculation.
Because there is no exercise price associated with restricted stock units, phantom stock units or LTIP units, these awards are not included in the
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.
The following table summarizes information, as of December 31, 2021, relating to our equity compensation plans
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, 2021, and 2020 (amounts in thousands,
except per share data).
Equity compensation plans approved by security holders (1)
3,944,302 (2) $
100.56 (3)
2,215,410 (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,
2021
2020
$
434,804 $
356,105
216,869
249,087
23,573
287,417
(32,757)
209,443
(23,794)
2,790
313,668
205,869
34,956
215,506
2,961
187,522
(60,454)
2,338
FFO attributable to SL Green common stockholders and unit holders
$
481,234 $
562,725
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)
70,769
1,794
72,563
$
$
6.80 $
6.63 $
75,078
4,039
79,117
7.50
7.11
(1)
(2)
During the first quarter of 2022, 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 2022, 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 retroactively adjusted 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 2021 reporting periods.
Funds Available for Distribution (FAD) Reconciliation:
Twelve Months Ended
December 31,
2021
2020
FFO attributable to SL Green common stockholders and unit holders
$
481,234 $
562,725
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
2,790
11,424
54,175
94,506
12,159
28,350
7,872
2,503
23,523
2,338
11,794
43,199
54,528
23,195
53,730
10,230
610
22,596
FAD attributable to SL Green stockholders and unit holders
$
380,710 $
455,167
102
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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
Dated: February 18, 2022
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.
Chairman of the Board of Directors and Chief
Executive Officer (Principal Executive Officer)
February 18, 2022
President and Director
February 18, 2022
/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 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
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105
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 18, 2022
________________________________________________________________________________________________________________________
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 18, 2022
President and Director
February 18, 2022
/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 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
February 18, 2022
104
105
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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
Dated: February 18, 2022
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.
/s/ Marc Holliday
Marc Holliday
/s/ Andrew W. Mathias
Andrew W. Mathias
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
/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
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 18, 2022
President and Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Chief Financial Officer of
SL Green, the sole general partner of
the Operating Partnership (Principal Financial and
Accounting Officer)
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
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106
107
SIGNATURES
By:
By:
SL GREEN OPERATING PARTNERSHIP, L.P.
SL Green Realty Corp.
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
Chief Financial Officer
Dated: February 18, 2022
________________________________________________________________________________________________________________________
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.
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
/s/ Matthew J. DiLiberto
Matthew J. DiLiberto
/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
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 18, 2022
President and Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Chief Financial Officer of
SL Green, the sole general partner of
the Operating Partnership (Principal Financial and
Accounting Officer)
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
Director of SL Green, the sole general
partner of the Operating Partnership
February 18, 2022
106
107
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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, 333-253652 and
333-261729) 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 18, 2022, 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, 2021.
December 31, 2021.
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-261729) of SL Green
Operating Partnership, L.P. and in the related Prospectus of our reports dated February 18, 2022, 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
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
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109
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, 333-253652 and
333-261729) 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 18, 2022, 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, 2021.
We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-261729) of SL Green
Operating Partnership, L.P. and in the related Prospectus of our reports dated February 18, 2022, 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, 2021.
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
/s/ Ernst & Young LLP
New York, New York
February 18, 2022
108
109
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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 18, 2022
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
Date: February 18, 2022
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
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110
111
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 18, 2022
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
Date: February 18, 2022
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
110
111
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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 18, 2022
/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 18, 2022
/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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112
113
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 18, 2022
/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 18, 2022
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the registrant
112
113
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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 18, 2022
1.
2.
Act of 1934; and
operations of the Company.
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
February 18, 2022
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3/2/22 8:05 AM
114
115
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 18, 2022
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 18, 2022
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 32.3
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 18, 2022
February 18, 2022
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3/2/22 8:05 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 32.3
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 18, 2022
February 18, 2022
116
117
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New York City Trends
Broadway & The Arts
Eric Adams Quotes
Tech
New York is now home to 103 unicorns with
cumulative valuation of $234.5 billion.
(Source: CB Insights)
Tech continues to increase on space requirements
post-Covid.
Facebook (META)
Farley lease
3.3m Total SF
Amazon
Lord & Taylor purchase
1.8m Total SF
Apple
11 Penn Plaza lease
400k Total SF
Google
St. John’s Terminal purchase
4.9m Total SF
Microsoft
122 Fifth lease
400k Total SF
(Source: Forbes)
Transportation
$1.2t bipartisan infrastructure plan boosts several
New York City projects:
• $13.5b — Roads And Highways / Bridge Repairs
• $58b — Rail improvements, including
Northeast Corridor
• $465m — NYC Airports
• $9.8b — For Clean Buses & Mass Transit
https://nypost.com/2021/11/06/
new-york-to-reap-more-than-100b
-in-infrastructure-cash/
“Last week, we had 92% of all seats filled for the
19 shows that we’re running,” said St. Martin.
“We have served over 4 million theatergoers since
we opened last fall. We anticipate that continuing
to be a little up, a little down, but we anticipate
over 85% of the seats filled before this season
ends on May 22.”
https://www.amny.com/entertainment/covid-19-
two-years-later-new-york-city-tourism/
“Thirty-five theaters full with an occupancy of
over 80% of the seats? We’re back,” said
Broadway League President Charlotte St. Martin ”
https://www.audacy.com/1010wins/news/local/
two-years-after-nycs-first-lockdown-tourism-makes-
comeback
“New York City’s recovery cannot and will not
be about going back to the way things were —
we are going to rebuild, renew, and reinvent our
city and our economy for today, tomorrow, and
generations to come,” said Mayor Adams.
https://www1.nyc.gov/office-of-the-mayor/
news/119-22/mayor-adams-rebuild-renew-
reinvent-blueprint-nyc-s-economic-recovery#/0
“We are back to being this exciting place we call
New York,” [Adams] told The Post Saturday.
https://nypost.com/2022/03/05/eric-adams-
marches-in-queens-county-st-patricks-day-
parade/
Eric Adams’ photo credit: Andrew Seng for The New
York Times.
Restaurants
Fun Events
To celebrate New York’s bustling dining industry,
the 30th Anniversary of NYC Restaurant Week
will start in July 2022.
https://business.nycgo.com/press-and-media/
press-releases/articles/post/
nyc-company-presents-22-reasons-to-visit-new-
york-city-in-2022/
Jobs
So this means that NYC has regained 79% of
office-using jobs lost during the pandemic.
(Source: OMB)
Tourism
During the 2021 holiday season, New York City
was the no. 1 destination for U.S. tourists.
https://www.nbcnewyork.com/entertainment/travel/
nyc-ranks-no-1-tourist-hotspot-this-holiday-season-
for-1st-time-since-pandemic/3427750/
56.4 million tourists expected in 2022.
https://www.nytimes.com/2022/02/18/nyregion/
omicron-tourism-nyc.html
Hotels
2021–2022 YTD:
• 29 New hotels opened
• 54 New hotels in active pipeline
(Source: NYC & Company 2021 Annual Report)
With the opening of new hotels like Aman on
Fifth Avenue and the Ritz Carlton in NoMad, it
is expected that 9,000 new hotel rooms will
be coming online in 2022.
https://business.nycgo.com/press-and-media/
press-releases/articles/post/nyc-company-
presents-22-reasons-to-visit-new-york-city-in-2022/
Full speed ahead! The New York City Marathon
returned for its 50th anniversary: 30k runners
in 2021.
https://gothamist.com/arts-entertainment/
photos-nyc-marathon-2021-return
Sports & Entertainment
The World’s Most Famous Arena is hosting
countless headliners in 2022 — from Elton John
to Andrea Bocelli and Billie Eilish, to name a
few! Live music is back to packed audiences!
Additionally, MSG welcomes back sporting events
including full schedules for hometown teams
the NY Rangers and NY Knicks.
https://www.instagram.com/thegarden/
Housing
2021 saw young people flock back to the city.
Young neighborhoods like Murray Hill saw a
122% increase in demand for move-in related
tasks, while the East Village saw a soaring 192%
increase, according to TaskRabbit.
https://nypost.com/2021/08/28/young-people-
flocking-back-to-big-apple/
Holiday Parades
Spectators returned to the streets of Manhattan
for the 95th annual Macy’s Thanksgiving Day.
https://www.reuters.com/world/us/
in-person-spectators-return-new-yorks-
thanksgiving-parade-2021-11-25/
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D
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
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
Andrew W. Mathias
President
Stephen L. Green
Chairman Emeritus
John H. Alschuler
Lead Independent Director;
Chair of the Board,
Executive Chair of Therme
North America
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
Chief Financial Officer and Senior
Managing Director of Vista Equity
Partners
Carol N. Brown
Professor of Real Estate Law,
University of Richmond School of Law
5-YEAR TOTAL RETURN TO SHAREHOLDERS > (Includes reinvestment of dividends)
( Based on $100 investment)
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
investor.relations@slgreen.com
www.slgreen.com
ANNUAL MEETING >
Wednesday, June 1, 2022
10:00 a.m. ET at
One Vanderbilt Avenue
New York, NY
EXECUTIVE OFFICES >
One Vanderbilt Avenue
New York, NY 10017
212-594-2700
www.slgreen.com
$250
200
150
100
50
’16
’17
’18
’19
’20
’21
SL GREEN REALTY CORP. S&P 500 DOW JONES INDUSTRIALS INDEX MSCI U.S. REIT INDEX
SL GREEN REALTY CORP.
One Vanderbilt Avenue
New York, NY 10017
212.594.2700
www.slgreen.com
30
SL GREEN ANNUAL REPORT 2021