25th Anniversary
SL GREEN
REALTY CORP.
2022 Annual Report
Financial Highlights
YEARS LISTED
25
FFO PER SHARE(2)
$6.76
COMBINED REVENUES
TOTAL TENANTS(3)
$1.5B
935
ENTERPRISE VALUE(1)
$14.4B
TOTAL SQUARE FEET(4)
33.1M
ANNUAL DIVIDEND PER SHARE
$3.25
MANHATTAN SAME-STORE
LEASED OCCUPANCY
91.2%
MANHATTAN PROPERTIES WITH
GREEN BUILDING DESIGNATION
96.0%
TOTAL EMPLOYEES
1,179
(1) Calculated as the sum of market value of common equity, liquidation value of preferred equity/units, consolidated
debt, and SLG share of unconsolidated joint venture debt
(2) Excludes non-cash fair value adjustments and gains/losses on the early extinguishment of debt
(3) Excluding residential tenants
(4) Includes interests in debt and preferred equity investments and suburban properties
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MARC HOLLIDAY
Chairman & Chief Executive Officer
ANDREW W. MATHIAS
President
SL Green: 25 Years at the Forefront of Change
DEAR SHAREHOLDERS,
In September, we gathered as a company at the New York
Stock Exchange to celebrate SL Green’s 25th year as a publicly
traded company. When we think back on a quarter-century
of accomplishment, there is one theme that has defined this
company from the beginning — we have always been at the
forefront of change.
From our start reinventing older buildings, to becoming New York’s
largest owner of premier commercial properties, to pioneering
a new and elevated standard for the future of work, we have
always been ahead of the pack in seeing opportunity and
evolving to best serve our shareholders and our city.
It is clear that we are now in another moment of significant
change, as businesses rethink their office needs and cities
around the world grapple with how the pandemic has changed
central business districts in a way no one could have predicted.
Here in New York, we were proud to join the “New New York”
panel convened by Governor Hochul and Mayor Adams to chart
a new course for the city’s economic future and ensure it remains
the most desirable place to live and work. Two conclusions from
the panel stand out to us.
First, New York is resilient. This city has reinvented its economy
time and time again, whether it’s responding to crises like 9/11
or identifying trends to attract and accelerate the growth of
new industries and sectors like technology and venture capital.
We always find a way to remain a global capital, attracting the
educated and diversified talent that leading and growing
companies need. In times of change, there’s no better place
to be than here in New York City.
And second, the future of this great city relies on rethinking
the arc of the workday and how we experience our central
business districts (CBD), transforming them into vibrant
24/7 destinations. Our lives can no longer be neatly
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separated into work, leisure and entertainment, and there’s
an expectation that people coming into the office will
have access to compelling experiences that make the trip
worthwhile — before, during and after the workday.
We are bringing this same innovative approach to each of
our portfolio buildings and can now definitively say that we are no
longer simply an office company — we’re in the recreation, hospitality
and experiences business! Buildings aren’t commodities anymore;
it’s not just about the provision of space. We have to operate our
buildings like a fine luxury brand, providing the highest levels of
amenity, service and trust on a daily basis.
What does that mean? Just as the CBD must become a
24/7 lifestyle product, our portfolio is evolving in the same
way, impacting all aspects of the lives of our tenants and
partners. Together we are innovating the future of how we
work, live and entertain, all focused on a belief that people
are at their best when they are physically connected in a
state-of-the-art, healthy and sustainable environment.
This new approach will manifest itself in different ways in the
years to come.
Across our premier portfolio of office properties, increasingly
concentrated along the highly desirable Park Avenue corridor,
we are providing solutions for tenants feeling their way through
the new modern workplace. We are building on the successful
formula we pioneered at One Vanderbilt, and are replicating at
One Madison, by bringing various features of a new amenity-
driven hospitality approach across our entire portfolio. Being
part of the SL Green family means that tenants can expect a
consistently world-class experience characterized by Michelin-
starred dining and approachable food and beverage options,
world-class fitness and wellness facilities, concierge services,
supportive spaces and healthy environments.
SL GREEN ANNUAL REPORT 2022 We are similarly helping to reinvent New York living, creating
great places for people to live at all income levels. Our recently
completed 7 Dey is a model for mixed-income rental housing
that we’ll look to build on in future projects. At the top end
of the market, this year we’ll begin marketing 10 residences at
the exclusive 760 Madison, in partnership with Giorgio Armani.
Also this year, our partnership with Pace will bring new and
much-needed student housing and academic facilities to
15 Beekman. And we are taking a lead role in the policy debate
around converting office to residential where appropriate —
a win/win/win for the City of New York, residents seeking
affordable housing, and the office industry.
We are also continuing to diversify and expand our offerings.
SUMMIT One Vanderbilt has been a massive success, both as
a global tourist attraction and social media phenomenon, and
we are exploring international expansion of the brand. We see
an equally exciting opportunity at our 1515 Broadway property
in the heart of Times Square, where we have partnered with
Caesars Entertainment and Roc Nation to propose a new gaming,
entertainment and hospitality destination that would bring
enormous benefit to the entire neighborhood and the City
as a whole.
Taken together, these actions will keep SL Green at the forefront
of change, adapting to new trends, innovating, and taking
advantage of this opportunity to help shape New York’s next
economy to ensure the City remains the most desirable place
in the world.
Looking Back at 2022
Before we look ahead to 2023 and beyond, let’s reflect on
2022 and all that we accomplished in continuously evolving and
sometimes challenging circumstances.
The past year was one of contradictions — we executed
most aspects of the business plan we set out to achieve but,
nonetheless, didn’t realize all of our financial goals due to
a confluence of market headwinds that materialized over the
course of the year. Historically rapid interest rate increases are
highly disruptive to the real estate debt and equity markets;
hybrid remote work is keeping day-to-day office occupancy
stubbornly below pre-pandemic levels; the technology sector,
which had been an engine of growth in NYC employment
for nearly a decade, is taking a pause; and broader global
economic uncertainty adds to a superfecta of external hurdles.
Given this environment, our achievements were truly remarkable:
• We executed to near perfection on our development and
redevelop ment projects, meeting our major milestones ahead
of schedule and under budget, and signing big new leases at
One Madison and 885 Third Avenue.
• We made several strategic acquisitions to extend our
commanding presence in East Midtown and throughout the
Park Avenue corridor, far and away the best performing
subdistrict in Manhattan.
• We managed overall expenses to a modest 4% increase, year
over year, reflective of our tight controls over property operating
expenses, and were able to achieve a reduction in our
G&A expense in the face of inflationary pressures on wages.
• We completed our first full year of operations at SUMMIT
One Vanderbilt, New York’s amazing new destination experience
that is now widely regarded as a must-see attraction for locals
and tourists alike.
• In just over a year since opening, we received a Michelin Star
at our highly acclaimed Le Pavillon; and in September we
opened J–oji, a new Japanese omakase experience underneath
One Vanderbilt that has already been added to Michelin’s
New York Guide, indicating that Michelin is considering it for
a 2023 Star rating.
• We reached new levels in our efforts to be guided by
environmental, social, and governance principles that help us
implement our strategy and be a responsible corporate citizen.
We are proud to be Great Place To Work® certified, signifying
the strength of the SL Green workplace experience.
• And, above all, we protected the balance sheet by maintaining
liquidity, managing debt levels and maturities, hedging our
exposure to rising rates, and solidifying our international
capital relationships as we continue our transition to an asset
management platform.
These results reflect the strength of our fortress holdings and
the extraordinary work that the SL Green team has done
over the years to narrow our focus to the very best buildings
in prime locations.
Positive Indicators in 2023
There are a number of indicators and developing trends that
give reason for optimism, even though last year’s challenging
environment has continued in the beginning of 2023.
Moderating Rates — A rapid runup in rates sent a chill through
the real estate debt markets as lenders became concerned
with decreasing interest coverage and refinance-ability of
maturing loans. 1 Month Term SOFR, the replacement index
for 1 Month LIBOR, today stands at 4.89%, up from 0.25% just
one year ago! But as the core inflation numbers begin to
normalize, and the labor market begins to cool, expectations,
as evidenced by the forward curve, show 1 Month Term SOFR
receding to 2.95% by end of 2024. Similarly, the 10-year
SOFR swap rate peaked at 3.97% just 6 months ago but is
already in 89 basis points, and the forward curve implies a
10-year SOFR swap rate of 2.89% by end of 2024. Clearly,
moderating rates will have a positive impact on the real estate
debt and equity capital markets. In the meantime, the company
has hedged most of its interest rate exposure through strategic
debt repayment and the use of derivative instruments like
interest rate swaps and caps.
NYC Employment — The labor market in NYC has shown
considerable resiliency as businesses employing office workers
had erased all Covid-era losses by the end of 2022, and office
using employment stood at a record 1.52 million workers,
2% higher than the beginning of 2020. There is recent evidence of
higher office utilization within our portfolio as physical occupancy
regularly exceeds 60% on many days of the workweek.
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SL GREEN’S 25-YEAR HISTORY IN ANNUAL REPORTS
Safety — New York City is becoming safer, with crime stats
heading in the right direction, including declines in overall
crime and violent crime in the first few months of 2023. This is
the start of a positive cycle, with more patrols on the streets
and subways making people feel safer, leading to increased
pedestrian activity that promotes even safer streets.
Tourism — For 2023, New York City is on track to welcome
63.3 million visitors, including more than 10.0 million
international travelers. That puts projected tourism within 5%
of prior record peak in 2019, a remarkable recovery.
East Side Access/Grand Central Madison — Perhaps one of
the most important developments of the year is the completion
of East Side Access, now known as Grand Central Madison.
For the first time, Long Island commuters have direct access to
Grand Central, opening East Midtown to a 1.4-million-person
workforce via a new $11.0-billion terminal spanning 43rd to
48th Streets along the Park and Madison Avenue corridors.
The MTA estimates that 45% of all LIRR commuters will
utilize the new terminal instead of Penn Station, bringing
160,000 people a day to our front door, where the majority of
our portfolio is located. With a short, easy, safe and pleasant
commute even more critical to business leaders encouraging
employees to work from office, the projected 40 minutes
per day or nearly 3.5 hours per week of saved commutation
time is a game-changer for what was already New York City’s
#1 business district.
This is the culmination of our vision for this area, which started with
the East Midtown rezoning, manifested itself at One Vanderbilt and
now includes the key piece of infrastructure that will help unlock
the pent-up demand for new and redeveloped office space in
and around Grand Central.
Our Plan for the Year
Given this context, what’s our plan for 2023?
First, we will continue to invest in our existing portfolio and our
fortress balance sheet, and continue to outperform and build
occupancy and de-risk in an increasingly competitive market.
With fewer companies in the market and downsizings occurring,
the pressure to make buildings reflect what tenants want and
need is more important than ever.
We believe that we’ve hit on a formula for success at
One Vanderbilt and One Madison that has helped set us apart
and will be critical as we navigate the next part of this cycle.
We will take this same approach across more of our portfolio,
upgrading existing buildings with the same level of amenity
and hospitality we’re bringing to our new construction.
These aren’t just nice amenities for tenants — they represent
leading-edge curation of experiences that attract New York’s
best businesses and generate substantial incremental revenues
to support the added costs of these great features.
Second, we’ll support the efforts of Governor Hochul and
Mayor Adams to create a new framework for transforming
obsolete office buildings into desperately needed housing in
about half the time required for new construction. This effort
should concentrate on the periphery of where commercial
districts meet residential neighborhoods, and the blueprint
must be both physically and economically feasible so as to
incentivize and allow for the conversion of millions of square
feet of office to residential dwellings on an expedited basis.
The enabling legislation has been proposed by the Governor
in her current budget that is being debated at the time of this
writing. With a housing crisis impacting the City and State,
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SL GREEN ANNUAL REPORT 2022 there is broad consensus at all levels of government to make
this happen, and we’re hopeful of seeing real action this year.
Third, we’ll continue our all-out pursuit of a full gaming license in
Times Square. We believe that a world-class gaming, entertainment
and hotel destination in the heart of Times Square — at our
1515 Broadway — can be the catalyst for revitalizing and
reinvigorating New York’s, and the world’s, #1 most important
tourist destination. With the support of a growing coalition
of small businesses, labor, restaurants and hotels, and local
residents, Caesars Palace Times Square is uniquely positioned
to maximize the benefit of gaming for New York.
The last major piece of our 2023 strategy is positioning
ourselves to capitalize on monumental opportunities in 2024
and beyond.
Given the global network of capital relationships we’ve
developed, and our standing as New York City’s leading real
estate sharpshooter, we will be well positioned to seek out
and invest in bailouts, rescues, recaps, and special servicing
situations — and we will capitalize on it. Billions of dollars
of new business opportunities will appear over the next
6–18 months, and we will have a significant advantage on
the rest of the market. So, in looking ahead to 2024, we are
optimistic about a scenario where the market right-sizes,
interest rates settle, and we get off the ground capitalizing
on new, attractive opportunities.
Closing: Thank You for 25 Years
As we reflect on the past 25 years, we are proud of the
tremendous growth of SL Green and its impact on New York
City. SL Green remains a key catalyst in the City’s revitalization,
investing in its future and building long-term value for our
shareholders, our tenants, our employees, and our community.
Most importantly, we want to thank everyone who has helped
make SL Green a success — our shareholders and partners, our
extraordinary Board, the leadership of New York State and
City, and especially our team. We’ve been incredibly lucky to
have built a leadership group that has stuck together through
the years, while at the same time providing opportunities for
young talent to grow and take on leadership roles.
Looking ahead to the coming years, we are excited to continue
forging a path for a sustainable New York City — the global capital
of commerce and culture — and the world’s best workforce.
New Yorkers will rally to solve the problems facing this great
city, and shareholders and partners will benefit as we help
reimagine New York City and take it to new heights. What we
can promise you is that you are investing with the right people:
we have a game plan, we will execute, there will be pockets of
very significant opportunity coming out of this…and we will
emerge even stronger, as we’ve done in the past.
Just know that we at SL Green are dedicated to always being
on the forefront of innovation and change to drive value for all
of our stakeholders.
Marc Holliday
Chairman & Chief Executive Officer
Andrew Mathias
President
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W H E R E N YC W O R K S
THE PARK AVENUE CORRIDOR
Over the past several years, we have
taken our primary focus on premier
East Midtown properties to the next
level, identifying the Park Avenue
corridor as the most desirable office
location in New York and perhaps the
world. From 23rd Street to 57th Street,
this area is unparalleled for com-
mutability, neighborhood amenities
and top-tier office product.
Leading global corporations such as
IBM, Carlyle, Blackstone and Citadel
have affirmed their commitment to the
corridor, and JP Morgan’s 2.3-million-
square-foot headquarters development
solidifies its desirability. This is further
enhanced by the many exceptional
restaurants, boutique retail, high-end
residences, and luxury hotels. No other
market offers a suite of amenities like
this for New York City’s business
community, making this the ideal place
to concentrate our portfolio.
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SL GREEN ANNUAL REPORT 2022 ONE MADISON AVENUE
Our dedication to the Park Avenue
corridor began 25 years ago with a
decision to focus our investments
around Grand Central Terminal. But it
was our passion and stalwart commit-
ment to the improvement of the area
via the rezoning of Midtown East that
solidified our allegiance to the area and
inspired the revitalization of the sub-
market. One Vanderbilt, our world-class
development and new headquarters,
was the first transformative project here,
and it initiated the corridor’s exciting
future and resurgence.
304 PARK AVENUE SOUTH
E 2 2 ND ST
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This image is a rendering.
SL GREEN ANNUAL REPORT 2022 11 MADISON AVENUE
100 PARK AVENUE
125 PARK AVENUE
E 2 4 TH ST
E 41ST ST
E 42 N D S T
ONE VANDERBILT
245 PARK AVENUE
280 PARK AVENUE
This image is a rendering.
In 2022, our presence expanded to include
450 Park Avenue and 245 Park Avenue,
and with One Madison Avenue set for
completion in 2023, SL Green is ideally
positioned from the top to the bottom
of this vital corridor. As companies adapt
to a rapidly changing business and
office landscape, there is an increased
premium on the best locations, putting
the Park Avenue corridor at the top of
everyone’s list.
E 46T H S T
E 4 8T H S T
10 EAST 53RD STREET
450 PARK AVENUE
625 MADISON AVENUE
E 5 3 RD ST
E 57T H S T
E 58 T H S T
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HOW NYC WOR KS
THE FUTURE OF THE
OFFICE EXPERIENCE
Changing workplace dynamics challenged us to rethink what
makes a successful office building. At One Madison Avenue,
we will meet the challenge with an unprecedented amenity
package, setting the standard for the future of workspace
environments. Work from office isn’t just about space anymore.
We are providing direct access to the best in wellness, food
and entertainment to maximize the experience of commuting
to work. By offering safe, healthy, sustainable spaces that enable
companies to build human connections and foster creativity,
ingenuity and productivity, we achieve highest and best use
of all spaces within the building.
THE ENTRANCE LOBBY
This image is a rendering.
This image is a rendering.
THE TENANT COMMONS
Designed to provide either a respite from the office or easy
gathering places for small groups — The Commons is a private,
tenant-only club-style retreat featuring a Daniel Boulud all-day café.
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SL GREEN ANNUAL REPORT 2022 This image is a rendering.
This image is a rendering.
ROOFTOP LOUNGE
THE MARKET
An impeccably designed indoor / outdoor work / entertainment space
offering sweeping city views, a landscaped patio overlooking Madison
Square Park, and a curated epicurean experience by Daniel Boulud.
On 23rd Street between Madison and Park Avenues,
The Market is a casual culinary destination packaged in the
convivial convenience of a traditional European food hall.
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STEAK BY DANIEL BOULUD
An open kitchen showcasing and celebrating the heritage
and theatricality of a wood-burning grill is the centerpiece
of this stylishly comfortable and refined steakhouse on
Park Avenue South.
CHELSEA PIERS FITNESS
With unrivaled space and activities, this state-of-the-art
facility delivers inspired fitness, sports and wellness from
New York City’s premier health and hospitality brand.
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SL GREEN
HOSPITALITY
Leading tenants now expect an office experience that combines
the best service and amenities to create an experience more akin
to the best restaurants, hotels and entertainment venues. In short,
we are now in the hospitality business and are embracing our
role, providing exceptional attention to detail in an extraordinary
environment featuring elevated food and beverage offerings.
We innovated this strategy at One Vanderbilt, fully integrating
a hotel ambiance with a superior amenity program. From the
base of the building to its very top — users are surrounded by a
thoughtful, refined elegance that flows effortlessly from space
to space, and we are taking the steps to ensure the program is
experienced throughout the portfolio.
ALTUS SUITES
For the leading corporations of the future, the sophisticatedly
designed, fully furnished turnkey-ready suites inspire intellect
and ingenuity — delivering companies to their next level.
LA TERRACE
The highly-crafted architectural design inside elevates the
casual atmosphere, while the expansive outdoor terrace refreshes
and energizes all who step out above Vanderbilt Plaza.
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SL GREEN ANNUAL REPORT 2022 LE PAVILLON
Lush gardens and olive trees set a serene mood at this
Michelin-starred restaurant where tenants, tourists, and
local connoisseurs celebrate seasonal freshness and
culinary refinement.
SUMMIT ONE VANDERBILT
Blending elements of art, technology, architecture, and thrill —
the world’s most immersive observatory and cultural experience
is a globally recognized success that energizes the imagination
and provides an unparalleled way to see New York City for
visitors and locals alike.
>1.7m
VISITORS
>$100m
ANNUAL REVENUE
–
OJI
J
Nestled beneath the lobby of One Vanderbilt is the height
of Japanese cuisine in an exclusive and hidden setting.
At New York City’s newest omakase destination, chef and
sommelier unite to curate a culinary journey for every guest.
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HOW NYC LIVE S
CONNECTING TO
ALL NEW YORKERS
If given the chance to drive our city forward and make a
positive impact, we will, especially for the people of New York
City. This is our home, and its residents are our neighbors.
As with commercial office, residential submarkets have their
needs and personalities, and our developments are tailored
to enhance communities and exceed residents’ expectations.
Working collaboratively with City and State elected officials,
we will continue to do our part to deliver high-quality housing
options that respond to strategic areas of demand. Whether
that’s building new multifamily residences that seamlessly
incorporate affordable homes, as we’ve done at 7 Dey Street,
or building new luxury condominiums, like 760 Madison Avenue.
While New York City continues to grapple with a shortage of
available housing, we believe it is essential for us to partner
with the City and support Mayor Adams’ housing initiatives.
Together, we are confident we will create new solutions that
positively impact the lives of New Yorkers.
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This image is a rendering.
7 DEY STREET
High design and affordability unite downtown at 7 Dey Street —
a modern glass tower that is the neighborhood’s first develop-
ment built under the Affordable New York Housing Program.
With quality of life at the forefront, we focused on convenience,
health and wellness, and entertainment. Living spaces offer
stylish high-end finishes and sun-drenching wall-to-wall windows,
while the amenity package meets the everyday live / work / play
needs of on-the-move New Yorkers.
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SL GREEN ANNUAL REPORT 2022
This image is a rendering.
760 MADISON AVENUE
At 760 Madison Avenue, we have partnered with Giorgio Armani
on an ultra-exclusive 10-unit condominium development and
new retail flagship for the famed designer. The terracotta-clad
new construction was designed by renowned architectural firm
COOKFOX with bespoke interiors by Giorgio Armani himself. The
Giorgio Armani Residences are being crafted with exceptional
attention to detail and a carefully curated sense of style, with each
home embracing the quiet confidence and classic elegance that
define the neighborhood and exemplify the finest in luxury living.
Moments from Central Park and situated among the most iconic
cultural institutions, designer flagship boutiques, and restaurants,
this development is impeccably refined and uncommonly private,
designed for the most discerning of buyers.
This image is a rendering.
This image is a rendering.
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HOW NYC PLAY S
A BETTER
TIMES SQUARE
New York City has the once-in-a-lifetime opportunity to take
Times Square — the world’s top tourist destination and
a major economic engine for New York — to the next level.
SL Green, in partnership with Caesars Entertainment and
Roc Nation, is pursuing a license to bring a world-class gaming
and entertainment facility to our property at 1515 Broadway.
The project, Caesars Palace Times Square, would convert the
existing office building into a stylish luxury hotel and gaming
facility — the first-ever venue for full gaming including live
tables in Manhattan.
Times Square is the ultimate entertainment destination and the
obvious choice for New York State’s newest gaming destination.
No other location provides the public transit access, tourist base,
and retail and dining options of Times Square. As longtime owners
and developers in Midtown, we believe that no company is better
positioned to bring live gaming to this iconic global destination.
We are in conversation with the community, residents, and
local businesses to outline our shared vision for Times Square’s
future. And we’re not alone in this effort, either. We’re honored
to be working with a broad coalition of local stores, restaurants,
hotels, bars, and labor unions — including Actors' Equity — who
support our proposal. Melba’s in Harlem and the New York
State Latino Restaurant, Bar & Lounge Association have also
joined our efforts — because New Yorkers know that what is
good for Times Square is good for all in our great city.
Rendering by MOTIV.
Rendering by Binyan Studios.
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SL GREEN ANNUAL REPORT 2022 Times Square has been called the “Crossroads of the World,” but
it is the crossroads of the Manhattan economy, as well. A vibrant and
thriving Times Square is crucial to New York’s future. We believe that
Caesars Palace Times Square can be a cornerstone of that future.
Rendering by Binyan Studios.
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HOW WE STRIVE
ACCOLADES IN SUSTAINABILITY
AWARDS / ACHIEVEMENTS
SOCIAL
Mayor’s Fund to Advance NYC
2022 Employer of the Year
Recruitment Partnership
with Workplace Diversity
Great Place to Work® Certified
NYC Service Mayoral Service
Recognition Participant
ENVIRONMENTAL
ESG
ENERGY STAR Partner of the Year
— Sustained Excellence
Validated Science-Based
Targets with SBTi
FTSE4Good Index Constituent
Green Lease Leaders, Platinum
GRESB Top 20% of Participants
CDP Highest Scoring Office REIT
State Street Global Advisors
R-Factor™ Outperformer
Sustainalytics’ 2023 Top-Rated
ESG Companies List
2023 S&P Global Sustainability
Yearbook Member
Top 10% in ISS Corporate
ESG Performance
Refinitiv Top 25% of all Residential
& Commercial REITs
Bloomberg Top 10 ESG Disclosure
Score Among Russell 1000 Index REITs
NEW YORK CITY’S SUMMER YOUTH EMPLOYMENT
PROGRAM (SYEP) AND LADDERS FOR LEADERS
SL Green partnered with the City to host 22 minority youth
interns. Each intern worked in eight unique roles at SL Green
and SUMMIT One Vanderbilt and attended presentations from
senior leaders in operations, construction, technology, finance,
and SUMMIT. Our interns also participated in workshops on
workplace professionalism, nutrition and wellness, and college
readiness, with the support of nonprofit organizations including
Dress for Success and That Suits You. In recognition of our
contributions to SYEP, SL Green was awarded 2022 Employer
of the Year by the Mayor’s Fund to Advance NYC.
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SL GREEN ANNUAL REPORT 2022 Community Involvement
Our most important responsibility as New York City’s largest
commercial office owner is engaging with our local community.
As a homegrown company, we share in the vision of building
a greater New York, so we make it a priority to enhance our
city through volunteerism and philanthropy.
FOOD1ST
SL Green is committed to alleviating food insecurity in
New York City. Born out of the COVID-19 pandemic, Food1st
was established by SL Green to provide meals to emergency
serv ice workers and vulnerable populations throughout the
city. Since its inception, Food1st has made a significant impact
on the community and continues to be a resource to our
fellow New Yorkers.
1m
MEALS
DELIVERED
40+
KITCHENS
ACTIVATED
300+
LOCATIONS
SERVED
$7,000,000
RAISED SINCE 2020
SUMMIT FOUNDATION
MENTORSHIP PROGRAM
SL Green aspires to create an engaged community and make
philanthropy a central part of our experience. One percent of
gross ticket sales at SUMMIT are reinvested in the community
through the SUMMIT Foundation, working with New York-focused
charities and organizations to change the world for the better.
Learn more at www.summitov.com / impact
SL Green partnered with the Governor’s Committee on
Scholastic Achievement (GCSA) and hosted 10th-grade
high school students from the local community and
paired them with a member to foster self-confidence
and provide better access to post-secondary educational
and career opportunities.
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SL Green’s 25-Year History
CURRENT AND PREVIOUS HOLDINGS
SL Green’s unrivaled presence includes more than 124 million
square feet of ownership and investments in Manhattan.
14TH STREET
23RD STREET
34TH STREET
42ND STREET
50TH STREET
57 TH STREET
59 TH STREET
S
E
C
O
N
D A
V
E
N
U
E
T
HIR
D A
V
E
N
U
E
L
E
X
I
N
G
T
O
N
A
V
E
N
U
E
P
A
R
K
A
V
E
N
U
E
M
A
D
I
S
O
N
A
V
E
N
U
E
F
I
F
T
H
A
V
E
N
U
E
65TH STREET
NOTE: Data as of 12.31.22; Only Manhattan properties represented on map and in table
(1) Includes Green Loan Services and CMBS bonds held by Belmont Insurance Company
22
SL GREEN ANNUAL REPORT 2022
SLG Owned Assets
SLG Current DPE(1)
SLG Prior Assets
SLG Prior DPE(1)
TOTAL
Number of
Properties
Square Feet
(in Millions)
45
13
58
77
103
238
28.9
7.6
36.5
25.8
61.8
124.1
14TH STREET
23RD STREET
34TH STREET
42ND STREET
50TH STREET
S
I
X
T
H
A
V
E
N
U
E
S
E
V
E
N
T
H
A
V
E
N
U
E
CENTRAL PARK SOUTH
57 TH STREET
N
I
N
T
H
A
V
E
N
U
E
T
E
N
T
H
A
V
E
N
U
E
C
E
N
T
R
B
R
O
A
D
W
A
Y
A
L
P
A
R
K
W
E
S
T
66TH STREET
23
SL Green Portfolio
Properties
(As of December 31, 2022)
OFFICE PROPERTIES
1 One Vanderbilt Avenue
2 Herald Square
2
10 East 53rd Street
3
11 Madison Avenue
4
100 Church Street
5
100 Park Avenue
6
110 Greene Street
7
125 Park Avenue
8
9
220 East 42nd Street
10 245 Park Avenue
11 280 Park Avenue
12 304 Park Avenue South
13 420 Lexington Avenue (Graybar)
14 450 Park Avenue
15 461 Fifth Avenue
16 485 Lexington Avenue
17 555 West 57th Street
18 711 Third Avenue
19 800 Third Avenue
20 810 Seventh Avenue
21 919 Third Avenue
22 1185 Avenue of the Americas
23 1350 Avenue of the Americas
24 1515 Broadway
25 Worldwide Plaza
SUBTOTAL
RETAIL PROPERTIES
26 11 West 34th Street
27 21 East 66th Street
28 85 Fifth Avenue
29 115 Spring Street
30 121 Greene Street
31 650 Fifth Avenue
32 690 Madison Avenue
33 717 Fifth Avenue
34 719 Seventh Avenue
35 1552–1560 Broadway
SUBTOTAL
DEVELOPMENT / REDEVELOPMENT
36 5 Times Square
37 19 East 65th Street
38 185 Broadway
39 625 Madison Avenue
40 750 Third Avenue
41 885 Third Avenue
SUBTOTAL
CONSTRUCTION IN PROGRESS
42 15 Beekman
43 One Madison Avenue
44 760 Madison Avenue
SUBTOTAL
RESIDENTIAL PROPERTIES
45 7 Dey Street
SUBTOTAL
NEW YORK CITY GRAND TOTAL
SUBURBAN PORTFOLIO
Landmark Square
SUBURBAN GRAND TOTAL
TOTAL PORTFOLIO
Ownership
Interest (%)
Submarket
Ownership
Occupancy
Square Feet (1) (%)
71.0
51.0
55.0
60.0
100.0
50.0
100.0
100.0
51.0
100.0
50.0
100.0
100.0
25.1
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
31.6
100.0
100.0
100.0
100.0
100.0
Grand Central
Herald Square
Plaza District
Park Avenue South
Downtown
Grand Central South
Soho
Grand Central
Grand Central
Park Avenue
Park Avenue
Midtown South
Grand Central North
Park Avenue
Midtown
Grand Central North
Midtown West
Grand Central North
Grand Central North
Times Square
Grand Central North
Rockefeller Center
Rockefeller Center
Times Square
Westside
Fee Interest
Leasehold Interest
Fee 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
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
Times Square
Plaza District
Lower Manhattan
Plaza District
Grand Central North
Midtown / Plaza District
Leasehold Interest
Fee Interest
Fee Interest
Leasehold Interest
Fee Interest
Fee / Leasehold Interest
20.0
25.5
100.0
Lower Manhattan
Park Avenue South
Plaza District
Leasehold Interest
Fee Interest
Fee Interest
100.0
Lower Manhattan
Fee Interest
100.0
Stamford, Connecticut
Fee Interest
1,657,198
369,000
354,300
2,314,000
1,047,500
834,000
223,600
604,245
1,135,000
1,782,793
1,219,158
215,000
1,188,000
337,000
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
23,961,519
17,150
13,069
12,946
5,218
7,131
69,214
7,848
119,550
10,040
57,718
319,884
1,127,931
14,639
50,206
563,000
780,000
218,796
2,754,572
221,884
1,396,426
58,574
1,676,884
140,382
140,382
28,853,241
862,800
862,800
29,716,041
96.8
84.6
96.0
96.4
90.3
84.2
86.1
95.7
92.6
83.9
95.9
100.0
85.0
79.8
77.1
76.6
96.8
94.7
84.2
86.5
99.9
69.3
88.1
99.7
91.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.4
—
88.3
22.5
5.5
25.9
18.1
24.0
76.5
N /A
N /A
N /A
89.5
79.3
(1) Square Feet — Represents the rentable square footage at the time the property was acquired
(2) The Company owns 50% of the fee interest
24
SL GREEN ANNUAL REPORT 2022
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green
Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were
formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its
affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, engaged in the
acquisition, development, redevelopment, repositioning, ownership, management and operation of commercial real estate
properties, principally office properties, located in the New York metropolitan area, principally Manhattan. Unless the context
requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the
Company, including the Operating Partnership.
The following discussion related to our consolidated financial statements should be read in conjunction with the financial
statements appearing in Item 8 of this Annual Report on Form 10-K. A discussion of our results of operations for the year
ended December 31, 2021 compared to the year ended December 31, 2020 is included in Part II, Item 7 Management's
Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year
ended December 31, 2021, filed with the SEC on February 18, 2022, and is incorporated by reference into this Annual Report
on Form 10-K.
Leasing and Operating
As of December 31, 2022, our same-store Manhattan office property occupancy inclusive of leases signed but not
commenced, was 91.2% compared to 93.0% as of December 31, 2021. We signed office leases in Manhattan encompassing
approximately 2.1 million square feet, of which approximately 0.8 million square feet represented office leases that replaced
previously occupied space.
According to Cushman & Wakefield, leasing activity in Manhattan improved significantly in 2022 totaling approximately
24.3 million square feet. Of the total 2022 leasing activity in Manhattan, the Midtown submarket accounted for approximately
16.5 million square feet, or approximately 67.9%. Manhattan's overall office vacancy went from 20.4% as of December 31,
2021 to 22.2% as of December 31, 2022. Overall average asking rents in Manhattan increased in 2022 by 2.8% from $69.67 per
square foot as of December 31, 2021 to $71.62 per square foot as of December 31, 2022, while Manhattan Class A asking rents
increased to $78.72 per square foot, up 3.2% from $76.29 as of December 31, 2021.
Acquisition and Disposition Activity
Overall Manhattan sales volume increased by 10.2% in 2022 to $23.0 billion as compared to $20.9 billion in 2021. In
2022, we continued to dispose of properties that were considered non-core or had a more limited growth trajectory, raising
efficiently priced capital that was used primarily for debt reduction. During the year, we closed on the sales of all or a portion of
our interests in 707 Eleventh Avenue, 1080 Amsterdam Avenue, the Stonehenge Portfolio, 1591-1597 Broadway, 609 Fifth
Avenue and 885 Third Avenue - Office Condominium Units for total gross valuations of $660.6 million, generating net
proceeds to the Company of $582.5 million.
Debt and Preferred Equity
In 2021 and 2022, in our debt and preferred equity portfolio we continued to focus on underwriting financings for
owners, acquirers or developers of properties in New York City. At the same time, we selectively sold certain investments,
some investments were repaid, and we converted some investments into equity ownership, the proceeds of which were utilized
to repurchase shares of common stock or for debt repayment. Our 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. During 2022, our debt and preferred
equity activities included funding of $100.5 million, inclusive of advances under future funding obligations, discount and fee
amortization, and paid-in-kind interest, net of premium amortization, and $565.9 million of sales, redemptions and
participations.
For descriptions of significant activities in 2022, refer to "Part I, Item 1. Business - Highlights from 2022."
Highlights from 2022
Our significant achievements from 2022 included:
Leasing
•
•
Signed 141 Manhattan office leases covering approximately 2.1 million square feet.
Signed a new lease with Franklin Templeton for 347,474 square feet at One Madison Avenue.
1
•
•
•
•
Signed a renewal and expansion lease with Kinney Systems, Inc. for 64,926 square feet at 555 West 57th Street.
Signed a new lease with International Business Machines Corporation ("IBM") for 328,000 square feet at One
Madison Avenue.
Signed a new lease with a global information services company for 236,026 square feet at 100 Park Avenue.
Signed a lease renewal with UN Women for 85,522 square feet at 220 East 42nd Street.
Acquisitions
•
•
•
Closed on the acquisition of 245 Park Avenue at a gross asset valuation of $2.0 billion. The Company previously
had a preferred equity investment in the property with a book value of $195.6 million.
Converted the previous mezzanine debt investment in 5 Times Square to a 31.55% common equity interest. The
Company's mezzanine debt investment in the property had a book value of $139.1 million.
Closed on the acquisition of 450 Park Avenue for $445.0 million in a newly formed joint venture. The Company
retained a 25.1% in the property.
Dispositions
•
•
•
•
•
•
Finance
•
•
•
Together with our joint venture partner, entered into an agreement to sell the retail condominiums at 121 Greene
Street for a gross sales price of $14.0 million. The transaction is expected to close in the first quarter of 2023.
Closed on the sale of 414,317 square feet of office leasehold condominium units at 885 Third Avenue for total
consideration of $300.4 million. The Company retained the remaining 218,796 square feet of the building.
Closed on the sale of the vacant office condominium at 609 Fifth Avenue for a gross sales price of $100.5 million.
Conveyed 1591-1597 Broadway for a gross sales price of $121.0 million.
Together with our joint venture partner, closed on the sale of 1080 Amsterdam Avenue for a gross sales price of
$42.5 million. Simultaneously, the Company sold its remaining interests in the Stonehenge portfolio for gross
consideration of $1.0 million.
Closed on the sale of 707 Eleventh Avenue for a gross sales price of $95.0 million.
Closed on a new $400.0 million corporate unsecured term loan facility. The facility matures in April 2024, as fully
extended. In January 2023, the facility was increased by $25.0 million to $425.0 million.
Refinanced the mortgage loan on 100 Church Street. The new $370.0 million mortgage loan, which replaced the
previous $197.8 million mortgage, has a term of up to 5 years and bears interest at a floating rate of 2.00% over
Term SOFR.
Executed $2.9 billion of LIBOR or SOFR swaps and caps to mitigate the effect of rising interest rates. As a result of
executed derivatives, the Company's share of net floating rate debt exposure was reduced to $1.1 billion, equating to
9.1% of total combined debt, as of December 31, 2022.
Debt and Preferred Equity Investments
•
Funded $100.5 million 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
$565.9 million of proceeds from sales, repayments and participations.
Corporate
•
Repurchased 2.0 million shares of our common stock and redeemed 0.8 million units of our Operating Partnership
under our $3.5 billion share repurchase program at an average price of $70.24 per share. From program inception
through December 31, 2022, we have repurchased a total of 36.1 million shares of our common stock and redeemed
2.6 million units of our Operating Partnership under the program at an average price of $87.51 per share.
2
As of December 31, 2022, 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:
Location
Property Type
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Number of
Properties
Approximate
Square Feet
Weighted
Average
Occupancy(1)
Consolidated
Unconsolidated
Total
Commercial:
Manhattan
Office
Retail
Development/
Redevelopment
(1)
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
(2)
Total portfolio
13
2
5
20
7
27
1
28
9,963,138
17,888
1,685,215
11,666,241
862,800
12,529,041
140,382
12,669,423
12
13,998,381
301,996
2,746,241
25
11
8
23,961,519
319,884
4,431,456
17,046,618
44
28,712,859
—
7
862,800
17,046,618
51
29,575,659
—
1
140,382
17,046,618
52
29,716,041
9
3
24
—
24
—
24
90.7 %
91.2 %
N/A
90.7 %
79.3 %
90.3 %
89.5 %
90.3 %
(1)
(2)
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, 2022, we owned a building at 7 Dey Street / 185 Broadway that was comprised of approximately 140,382 square feet (unaudited) of
residential space and approximately 50,206 square feet (unaudited) of office and retail space. For the purpose of this report, we have included this
building in the number of residential properties we own. However, we have included only the residential square footage in the residential approximate
square footage, and have listed the balance of the square footage as development square footage.
As of December 31, 2022, we also managed one office building owned by a third party encompassing approximately 0.3
million square feet, and held debt and preferred equity investments with a book value of $623.3 million, excluding debt and
preferred equity investments and other financing receivables totaling $8.5 million 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
3
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. 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.
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.
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
4
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, 2022.
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
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.
5
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.
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.
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
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,
6
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.
7
Results of Operations
Comparison of the year ended December 31, 2022 to the year ended December 31, 2021
The following comparison for the year ended December 31, 2022, or 2022, to the year ended December 31, 2021, or
2021, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2021 and still owned by
us in the same manner as of December 31, 2022 (Same-Store Properties totaled 20 of our 28 consolidated operating
properties),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2022 and 2021 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 2022 and 2021, 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
2022
2021
$
Change
%
Change
2022
2021
2022
2021
2022
2021
$
Change
%
Change
$ 556.7 $ 530.0 $ 26.7
—
—
5.0 % $ 0.9 $ 38.9 $ 113.9 $ 109.3 $ 671.5 $ 678.2 $
— % —
81.1
—
80.3
81.1
80.3
3.9
—
— % 10.4
27.5
59.8
54.1
74.1
85.5
560.6
533.9
26.7
5.0 % 11.3
66.4
254.8
243.7
826.7
844.0
—
3.9
Property operating expenses
266.7
260.1
6.6
2.5 %
2.0
17.5
70.5
68.9
339.2
346.5
0.2
(0.2)
(100.0) % —
—
0.4
3.6
0.4
3.8
Transaction related costs
Marketing, general and
administrative
—
—
—
—
— % —
—
93.8
94.9
93.8
94.9
(1.1)
266.7
260.3
6.4
2.5 %
2.0
17.5
164.7
167.4
433.4
445.2
(11.8)
(6.7)
0.8
(11.4)
(17.3)
(7.3)
(3.4)
(1.0) %
1.0 %
(13.3) %
(2.0) %
(2.1) %
(89.5) %
(1.2) %
(2.7) %
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 on sale of
interest in unconsolidated
joint venture/real estate
Purchase price and other fair
value adjustments
(Loss) 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 (loss) income
Rental Revenue
$ (97.3) $ (82.3) $ (15.0)
18.2 %
(215.3)
(216.9)
1.6
(0.7) %
(58.0)
(55.4)
(2.6)
4.7 %
(0.1)
(32.8)
32.7
(99.7) %
(8.1)
210.1
(218.2)
(103.9) %
(84.5)
287.4
(371.9)
(129.4) %
(6.3)
(23.8)
17.5
(73.5) %
—
(1.6)
1.6
(100.0) %
—
(2.9)
2.9
(100.0) %
$ (76.3) $ 480.6 $ (556.9)
(115.9) %
Rental revenues decreased primarily due to the deconsolidation of 220 East 42nd Street as a result of the sale of a joint
venture interest during the third quarter of 2021 ($39.0 million), our Disposed Properties ($37.9 million) and properties moved
into redevelopment ($23.4 million). This was offset by the acquisition of 245 Park Avenue ($54.3 million), a higher
contribution from our Same-Store Properties ($26.7 million) and a higher contribution from our other Acquired Properties
($11.3 million).
8
The following table presents a summary of the commenced leasing activity for the year ended December 31, 2022 in our
Manhattan portfolio:
Usable
SF
Rentable
SF
New
Cash
Rent (per
rentable
SF) (1)
Prev.
Escalated
Rent (per
rentable
SF) (2)
TI/LC
per
rentable
SF
Free
Rent (in
months)
Average
Lease
Term (in
years)
Manhattan
Space available at beginning of the year
Acquired vacancies
Property out of 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
1,638,009
219,632
107,612
1,095,429
185,458
23,863
1,304,750
3,270,003
841,915
156,178
7,577
912,917 $
77.53 $
74.72 $
164,763 $
73.69 $
86.66 $
7,832 $
25.92 $
27.47 $
88.64
43.61
2.36
Total leased space commenced
1,005,670
1,085,512 $
76.58 $
76.61 $
81.18
Total available space at end of year
2,264,333
Early renewals
• Office
• Retail
• Storage
181,368
202,336 $
72.34 $
73.85 $
45.63
23,789
4,176
24,642 $
236.36 $
238.28 $
4,183 $
31.89 $
30.30 $
—
—
Total early renewals
209,333
231,161 $
89.10 $
90.59 $
39.94
Total commenced leases, including replaced
previous vacancy
• Office
• Retail
• Storage
Total commenced leases
1,115,253 $
76.59 $
74.51 $
189,405 $
94.85 $
108.77 $
12,015 $
28.00 $
28.69 $
80.83
37.94
1.54
1,316,673 $
78.77 $
79.83 $
73.94
8.8
3.9
3.8
8.0
5.7
—
4.3
5.1
8.3
3.4
4.0
7.5
9.5
8.4
5.5
9.3
7.1
4.3
6.7
6.8
9.0
7.9
5.9
8.8
(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 $70.79 per rentable square feet for 623,803 rentable square feet. Average
starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $71.17 per rentable square feet for
826,139 rentable square feet.
Investment Income
Investment income increased primarily as a result of an increase in the weighted average yield of our debt and preferred
equity investments due to recognition of previously unrecorded default interest on our preferred equity investment at 245 Park
Avenue in the third quarter of 2022. For the years ended December 31, 2022 and 2021, the weighted average balance of our
debt and preferred equity investment portfolio and the weighted average yield were $1.0 billion and 8.3%, respectively,
compared to $1.1 billion and 7.1%, respectively. As of December 31, 2022, the debt and preferred equity investment portfolio
had a weighted average term to maturity of 1.4 years excluding extension options.
Other Income
Other income decreased primarily due to lower lease termination income for the year ended December 31, 2022
($5.4 million) as compared to the same period in 2021 ($22.6 million), and a decrease in acquisition fee income related to joint
venture properties ($2.5 million). This decrease was offset by an increase in construction fee income ($6.2 million), and income
related to the resolution of the Company's investment in 1591-1597 Broadway ($5.0 million).
9
Property Operating Expenses
Property operating expenses decreased primarily due to the sale of a joint venture interest and deconsolidation of 220 East
42nd Street ($12.9 million) in the third quarter of 2021, and reduced real estate taxes at our Same-Store Properties
($8.2 million). Further decreases resulted from reduced variable expenses and real estate taxes at our Disposed Properties
($7.9 million and $7.3 million, respectively), partially offset by increased variable expenses at our Same-Store Properties
($14.7 million) and increasesd real estate taxes and variable expenses at our Acquired Properties ($6.8 million and $5.6 million,
respectively).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses decreased to $93.8 million for the year ended December 31, 2022,
compared to $94.9 million for the same period in 2021 due to reduced compensation expense.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, increased primarily due to acquiring
245 Park Avenue in the third quarter of 2022 ($21.9 million) and a significant increase in average LIBOR and SOFR rates
during the year ended December 31, 2022 as compared to the year ended December 31, 2021 ($24.6 million), which was
primarily due to term loans ($9.8 million) and the revolving credit facility ($8.4 million). These increases were offset by the
deconsolidation of 220 East 42nd Street ($11.1 million) in the third quarter of 2021, repayments of unsecured bonds
($10.9 million), the partial repayment of term loans ($6.2 million) in the fourth quarter of 2021, and the sale of 1080
Amsterdam Avenue ($2.5 million) in the second quarter of 2022. The weighted average consolidated debt balance outstanding
was $4.6 billion for the year ended December 31, 2022, compared to $4.8 billion for the year ended December 31, 2021. The
consolidated weighted average interest rate was 3.55% for the year ended December 31, 2022, as compared to 2.93% for the
year ended December 31, 2021.
Depreciation and Amortization
Depreciation and amortization decreased primarily due to our Disposed Properties ($15.1 million) and to the
deconsolidation of 220 East 42nd Street ($9.5 million) as a result of the interest sale during the third quarter of 2021, partially
offset by increased depreciation and amortization at our Acquired properties ($25.3 million).
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures increased primarily as a result of increased interest expense across
our joint venture portfolio ($28.3 million) and a decrease in income from operations at Worldwide Plaza ($3.7 million), 450
Park Avenue ($3.2 million) and 919 Third Avenue ($3.1 million). This was offset by an increase in income from operations at
One Vanderbilt Avenue ($28.6 million), 1515 Broadway ($6.3 million) and 220 East 42nd Street ($5.0 million).
Equity in net loss on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2022, we recognized a loss on the sale of our interest in the Stonehenge Portfolio.
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).
Purchase price and other fair value adjustments
During the year ended December 31, 2022, we recorded a $6.4 million fair value adjustment related to an investment in
marketable securities and a $1.7 million fair value adjustment related to derivatives that are not designated as hedges. 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 a 49.0% joint venture interest was sold.
(Loss) gain on sale of real estate, net
During the year ended December 31, 2022, we recognized losses on the sales of 609 Fifth Avenue ($80.2 million), 885
Third Avenue ($24.0 million) and 707 Eleventh Avenue ($0.8 million), offset by a gain on the sale of 1080 Amsterdam Avenue
($17.9 million). 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).
10
Depreciable Real Estate Reserves and Impairments
During the year ended December 31, 2022, we recognized depreciable real estate reserves and impairments related to 121
Greene Street ($6.3 million) as the investment was under contract for sale as of December 31, 2022. 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).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2022, we did not recognize any loan loss and other investment reserves. 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.
Comparison of the year ended December 31, 2021 to the year ended December 31, 2020
For a comparison of the year ended December 31, 2021 to the year ended December 31, 2020, 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, 2021, which was filed with the SEC on February 18, 2022.
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.
11
The combined aggregate principal maturities of mortgages and other loans payable, the 2021 credit facility, 2022 term
loan, 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, 2022 are as follows (in thousands):
Property mortgages and
other loans
Revolving credit facility
Unsecured term loans
Senior unsecured notes
Trust preferred securities
Financing leases
Operating leases
2023
2024
2025
2026
2027
Thereafter
Total
$
265,975 $
337,237 $
370,000 $
— $ 2,262,750 $
— $ 3,235,962
—
—
—
—
3,133
52,220
—
600,000
—
—
3,180
58,068
215,483
894,655
—
—
100,000
—
3,228
58,207
180,664
1,466,750
—
—
—
—
3,276
58,347
154,702
226,224
450,000
1,000,000
—
450,000
50,000
1,650,000
—
—
3,325
58,358
54,636
—
100,000
200,169
100,000
100,000
216,311
1,334,570
1,619,770
37,163
891,052
299,417
2,130,404
6,172,915
Estimated interest expense
248,404
Joint venture debt
1,155,465
Total
$ 1,725,197 $ 2,108,623 $ 2,178,849 $
442,549 $ 4,128,486 $ 3,852,306 $ 14,436,010
We estimate that for the year ending December 31, 2023, we expect to incur $82.0 million of recurring capital
expenditures on existing consolidated properties and $117.5 million of development or redevelopment expenditures on existing
consolidated properties, of which $1.2 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 $263.1 million, of which $160.7 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, 2022, we had liquidity of $1.0 billion, comprised of $800.0 million of availability under our
revolving credit facility and $214.5 million of consolidated cash on hand, inclusive of $11.2 million of marketable securities.
This liquidity excludes $143.8 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 are generally considered to be
financially stable. 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 $384.1 million and $337.0 million as of December 31, 2022 and 2021,
respectively, representing a increase of $47.1 million. The increase was a result of the following changes in cash flows (in
thousands):
Year Ended December 31,
2022
2021
(Decrease)
Increase
Net cash provided by operating activities
Net cash provided by investing activities
Net cash used in financing activities
$
$
$
276,088 $
425,805 $
(654,823) $
255,979 $
993,581 $
(1,285,371) $
20,109
(567,776)
630,548
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
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, 2022, when compared to the year ended December 31, 2021, 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 and restricted cash assumed from acquisition of real estate investment
Cash assumed from consolidation of real estate investment
Debt and preferred equity and other investments
Decrease in net cash provided by investing activities
$
88,300
1,716
(95,646)
(628,862)
(25,230)
60,494
(9,475)
40,927
$
(567,776)
Funds spent on capital expenditures, which are comprised of building and tenant improvements, decreased from $302.5
million for the year ended December 31, 2021 to $300.8 million for the year ended December 31, 2022 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, 2022, when compared to the year ended December 31, 2021,
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
Decrease in net cash used in financing activities
Capitalization
$
378,291
26,680
53,237
15,970
(1,031)
190,206
(11,927)
(29,817)
8,939
$
630,548
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, 2022, 64,380,082 shares of common stock and no
shares of excess stock were issued and outstanding.
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.
13
As of December 31, 2022, 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
Year ended 2022
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
8,276,032
4,474,649
1,971,092
$107.81
$102.06
$88.69
$64.30
$75.44
$76.69
7,865,206
17,052,686
21,385,946
29,661,978
34,136,627
36,107,719
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, 2022, 2021, and 2020, respectively (dollars in
thousands):
Year Ended December 31,
2022
2021
2020
Shares of common stock issued
10,839
10,387
Dividend reinvestments/stock purchases under the DRSPP
$
525 $
738 $
16,181
1,006
Fifth Amended and Restated 2005 Stock Option and Incentive Plan
The Fifth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Company's Board of Directors in April 2022 and its stockholders in June 2022 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
32,210,000 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, 2022, 6.3 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.
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, 2022, 27,436 phantom stock units and 9,571 shares of common stock were issued to
our Board of Directors. We recorded compensation expense of $2.7 million during the year ended December 31, 2022 related to
the Deferred Compensation Plan. As of December 31, 2022, there were 192,638 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
14
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, 2022, 191,845 shares of our common stock had been issued under the ESPP.
Indebtedness
The table below summarizes our consolidated mortgages and other loans payable, 2021 credit facility, 2022 term loan,
senior unsecured notes and trust preferred securities outstanding as of December 31, 2022 and 2021, (amounts in thousands).
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,
2022
2021
$
$
2,695,814
$
2,320,000
5,015,814
520,148
5,535,962
$
144,056
376,092
90.6 %
9.4 %
100.0 %
3.60 %
3.23 %
3.55 %
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)
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 7.0% and 13.4% as of December 31, 2022 and December 31, 2021, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (4.39% and 0.10%
as of December 31, 2022 and 2021, respectively), and adjusted Term SOFR (4.30% and 0.05% as of December 31, 2022 and
2021, respectively). Our consolidated debt as of December 31, 2022 had a weighted average term to maturity of 3.76 years.
Certain of our debt and equity investments and other investments, with carrying values of $144.1 million as of
December 31, 2022 and $295.0 million as of December 31, 2021, 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 7.0% and 13.4% as of December 31, 2022 and 2021, respectively.
Mortgage Financing
As of December 31, 2022, our total mortgage debt (excluding our share of joint venture mortgage debt of $6.2 billion)
consisted of $3.2 billion of fixed rate debt, including swapped variable rate debt, with an effective weighted average interest
rate of 4.44% and $0.1 billion of variable rate debt with an effective weighted average interest rate of 3.72%.
15
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, 2022, 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, 2022, 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, 2022, the applicable spread over adjusted Term SOFR plus 10 basis points was 105 basis points for
the revolving credit facility, 120 basis points for Term Loan A, and 125 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, 2022, the facility
fee was 25 basis points.
As of December 31, 2022, we had $2.0 million of outstanding letters of credit, $450.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $800.0 million under
the 2021 credit facility. As of December 31, 2022 and December 31, 2021, the revolving credit facility had a carrying value of
$443.2 million and $381.3 million, respectively, net of deferred financing costs. As of December 31, 2022 and December 31,
2021, the term loan facilities had a carrying value of $1.2 billion and $1.2 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).
2022 Term Loan
In October 2022, we entered into a term loan agreement, referred to as the 2022 term loan. As of December 31, 2022, the
2022 term loan consisted of a $400.0 million term loan with a maturity date of October 6, 2023. The 2022 term loan has one
six-month as-of-right extension option to April 6, 2024. We also have an option, subject to customary conditions, to increase
the capacity of the 2022 term loan to $500.0 million on or before January 7, 2023 without the consent of existing lenders, by
obtaining additional commitments from our existing lenders and other financial institutions. In January 2023, the 2022 term
loan was increased by $25.0 million to $425.0 million.
As of December 31, 2022, the 2022 term loan bore interest at a spread over adjusted Term SOFR plus 10 basis points,
ranging from 100 basis points to 180 basis points, 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, 2022, the applicable spread over adjusted Term SOFR plus 10 basis points was 140 basis points. As of
December 31, 2022, the 2022 term loan had a carrying value of $398.2 million, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2022 term loan.
The 2022 term loan includes certain restrictions and covenants (see Restrictive Covenants below).
16
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 provided us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bore
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advanced rate. The facility
matured in June 2022 and was not extended.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2022 and 2021,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
December 17, 2015 (2)
October 5, 2017 (3)
November 15, 2012
December
31,
2022
Unpaid
Principal
Balance
December
31,
2022
Accreted
Balance
December
31,
2021
Accreted
Balance
$
100,000 $
100,000 $
100,000
—
—
—
—
499,913
301,002
$
100,000 $
100,000 $
900,915
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
4.27 %
3.25 %
4.50 %
10 December 2025
5 October 2022
10 December 2022
Deferred financing costs, net
(308)
(1,607)
$
100,000 $
99,692 $
899,308
(1)
(2)
(3)
Interest rate as of December 31, 2022, taking into account interest rate hedges in effect during the period.
Issued by the Company and the Operating Partnership as co-obligors.
Issued by the Operating Partnership with the Company as the guarantor.
Restrictive Covenants
The terms of the 2021 credit facility, 2022 term loan 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, 2022 and 2021, 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.
17
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, 2022, 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 $3.5 million and would increase our share of joint venture annual interest cost by
$6.5 million. As of December 31, 2022, $144.1 million, or 23.1%, of our $0.6 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.
Our long-term debt of $5.0 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, 2022 bore
interest based on a spread to LIBOR of 145 basis points to 340 basis points, and adjusted Term SOFR of 115 basis points to 577
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.
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, 2022 term loan 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, were
previously 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 $1.4 million, $1.7 million and $1.4 million for the years ended December 31, 2022, 2021 and 2020,
respectively.
We also recorded expenses, inclusive of capitalized expenses, of $8.6 million, $14.0 million and $13.3 million for the
years ended December 31, 2022, 2021 and 2020, respectively, for these services (excluding services provided directly to
tenants).
18
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.7 million and $0.6 million for the
years ended December 31, 2022, 2021 and 2020 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 (inclusive of the property and Summit One Vanderbilt) 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 equaled 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 have the right to tender their interests in the project upon stabilization (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 a tender of the interests will equal the liquidation value of the interests at the time, with the value
being based on the project's sale price, if applicable, or fair market value as determined by an independent third party appraiser.
In 2022, stabilization of the property (but not Summit One Vanderbilt) was achieved. Therefore, Messrs. Holiday and Mathias
exercised their rights to tender 50% of their interests in the property (but not Summit One Vanderbilt) for liquidation values of
$17.9 million and $11.9 million, respectively, which were paid in July 2022.
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, 2022 and 2021 we recorded $3.0 million and $2.4 million, respectively, of rent expense under
the lease. Additionally, in June 2021, we, through a wholly-owned subsidiary, entered into a lease agreement with the One
Vanderbilt Avenue joint venture for Summit One Vanderbilt, which commenced operations in October 2021. For the year
ended December 31, 2022, we recorded $33.0 million of rent expense under the lease, including percentage rent, of which
$22.8 million was recognized as income as a component of Equity in net loss from unconsolidated joint ventures in our
consolidated statements of operations. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under
the lease with no percentage rent. 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 two 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.
19
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net
leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with
such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be
maintained or adequately cover our risk of loss.
Funds from Operations
FFO is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in
accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not
compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company
does. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002, and subsequently
amended in December 2018, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or
losses) from sales of properties , and real estate related impairment charges, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and joint ventures.
The Company presents FFO because it considers it an important supplemental measure of the Company’s operating
performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation
of REITs, particularly those that own and operate commercial office properties. The Company also uses FFO as one of several
criteria to determine performance-based compensation for members of its senior management. FFO is intended to exclude
GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate
assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions.
Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions, and real
estate related impairment charges, it provides a performance measure that, when compared year over year, reflects the impact to
operations from trends in occupancy rates, rental rates, operating costs, and interest costs, providing perspective not
immediately apparent from net income. FFO does not represent cash generated from operating activities in accordance with
GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of
the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including our
ability to make cash distributions.
FFO for the years ended December 31, 2022, 2021, and 2020 are as follows (in thousands):
Year Ended December 31,
2022
2021
2020
Net (loss) income attributable to SL Green common stockholders
$
(93,024) $
434,804 $
356,105
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net (loss) 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
(Loss) gain on sale of real estate, net
Purchase price and other fair value adjustments
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
215,306
252,893
(4,672)
216,869
249,087
23,573
313,668
205,869
34,956
(131)
(32,757)
2,961
(6,313)
(84,485)
—
2,605
458,827 $
276,088 $
425,805 $
(23,794)
287,417
209,443
2,790
481,234 $
255,979 $
(60,454)
215,506
187,522
2,338
562,725
554,236
993,581 $
1,056,430
(654,823) $
(1,285,371) $
(1,479,301)
$
$
$
$
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.
20
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. We do not anticipate any material financial impact on our portfolio in the first compliance period of
2024 to 2029.
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. The Company is also committed to setting near-term Scope 1 and Scope 2 science-based
emissions reduction targets with the SBTi, which are currently in the validation process. Our goal is to reduce emissions for our
operationally controlled portfolio to align it with the 1.5 degree Celsius climate scenario.
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
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies - Accounting Standards
Updates" in the accompanying consolidated financial statements.
Forward-Looking Information
This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All
statements, other than statements of historical facts, included in this report that address activities, events or developments that
we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends
and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York
metropolitan area markets, business strategies, expansion and growth of our operations and other similar matters, are forward-
looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions, expected future developments and other factors we
believe are appropriate.
Forward-looking statements are not guarantees of future performance and actual results or developments may differ
materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally
identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project,"
"continue," or the negative of these words, or other similar words or terms.
Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our
actual results, performance or achievements to be materially different from future results, performance or achievements
expressed or implied by forward-looking statements made by us. These risks and uncertainties include:
•
•
•
•
•
the effect of general economic, business and financial conditions, and their effect on the New York City real
estate market in particular;
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;
21
•
•
•
•
•
•
•
•
•
•
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy,
and increasing availability of sublease space;
availability of capital (debt and equity);
unanticipated increases in financing and other costs, including a rise in interest rates;
our ability to comply with financial covenants in our debt instruments;
our ability to maintain our status as a REIT;
risks of investing through joint venture structures, including the fulfillment by our partners of their financial
obligations;
the threat of terrorist attacks;
our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of
our insurance coverage, including as a result of environmental contamination; and
legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business
including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other
similar laws and regulations.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this
report and in our other filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
22
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See Item 7, "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, 2022 (in thousands):
Long-Term Debt
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
Debt and Preferred
Equity Investments (1)
Amount
Weighted
Yield
2023
2024
2025
2026
2027
Thereafter
Total
Fair Value
$
$
$
Fixed
Rate
255,827
877,237
470,000
—
3,262,750
150,000
4.37 % $
4.39 %
4.31 %
4.26 %
4.81 %
4.84 %
5,015,814
4.34 % $
4,784,691
$
10,148
60,000
—
—
450,000
—
520,148
519,669
6.02 % $
446,532
6.44 %
5.12 %
4.36 %
2.15 %
— %
— %
5.12 % $
6,890
30,000
—
119,858
20,000
623,280
— %
8.52 %
— %
6.55 %
8.11 %
6.54 %
(1)
Our debt and preferred equity investments had an estimated fair value ranging between $0.6 billion and $0.6 billion as of December 31, 2022.
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, 2022 (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total
Fair Value
Long Term Debt
Fixed
Rate
Average
Interest
Rate
Variable
Rate
Average
Interest
Rate
$
$
$
634,563
738,175
1,449,386
226,207
299,400
2,130,301
5,478,032
3,552,398
4.04 % $
3.83 %
3.57 %
3.18 %
3.14 %
2.86 %
520,902
156,480
17,364
17
17
103
3.68 % $
694,883
$
1,987,218
8.51 %
9.15 %
6.42 %
6.00 %
6.00 %
6.02 %
8.78 %
23
The table below lists our consolidated derivative instruments, which are hedging variable rate debt, and their related fair
values as of December 31, 2022 (in thousands):
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Cap
Asset
Hedged
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
Credit Facility
LIBOR
$ 100,000
0.212 %
January 2021
January 2023 $
333
Credit Facility
Credit Facility
Mortgage
Mortgage
Credit Facility
Credit Facility
Mortgage
Mortgage
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
400,000
0.184 %
January 2022
February 2023
1,453
50,000
0.633 %
February 2022
February 2023
158
370,000
3.250 %
December 2022
June 2023
2,471
370,000
3.250 %
December 2022
June 2023
(2,465)
100,000
1.163 % November 2021
200,000
1.133 % November 2021
July 2023
July 2023
2,133
4,300
LIBOR
600,000
4.080 % September 2022
September 2023
(3,341)
LIBOR
50,000
3.500 %
October 2022
September 2023
505
104
Interest Rate Swap
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
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Mortgage
Mortgage
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Credit Facility
Mortgage
Credit Facility
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
SOFR
200,000
4.739 % November 2022
November 2023
196,717
3.500 % November 2022
November 2023
2,232
196,717
3.500 % November 2022
November 2023
(2,225)
150,000
2.700 %
December 2021
January 2024
3,249
200,000
4.590 % November 2022
January 2024
200,000
4.511 % November 2022
January 2024
593
750
150,000
2.721 %
December 2021
January 2026
5,848
200,000
2.762 %
December 2021
January 2026
7,601
100,000
3.003 %
February 2023
February 2027
3,264
100,000
2.833 %
February 2023
February 2027
3,888
50,000
2.563 %
February 2023
February 2027
2,441
200,000
2.691 %
February 2023
February 2027
8,823
300,000
2.966 %
July 2023
May 2027
7,514
370,000
3.888 % November 2022
June 2027
(1,900)
100,000
3.756 %
January 2023
January 2028
(211)
Total Consolidated Hedges
$ 47,518
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 $61.5 million in the aggregate as of
December 31, 2022. We also swapped certain floating rate debt at some of our joint ventures. These swaps represented an asset
of $12.6 million in the aggregate as of December 31, 2022.
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Total Unconsolidated Hedges
Asset
Hedged
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Benchmark
Rate
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Fair
Value
LIBOR
$ 23,000
4.750 %
January 2021
January 2023 $
LIBOR
220,000
4.000 %
February 2022
February 2023
—
93
LIBOR
510,000
3.000 %
December 2021
June 2023
4,220
SOFR
SOFR
267,000
4.000 %
July 2022
August 2023
1,289
400,000
3.500 % September 2022
September 2023
3,839
LIBOR
1,075,000
4.080 % September 2022
September 2023
6,004
LIBOR
125,000
4.080 % September 2022
September 2023
698
SOFR
SOFR
SOFR
118,670
0.490 %
February 2022
May 2024
22,669
118,670
0.490 %
February 2022
May 2024
22,652
177,000
1.669 %
December 2022
February 2026 12,576
$ 74,040
24
SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands, except per share data)
December 31, 2022
December 31, 2021
Assets
Commercial real estate properties, at cost:
Land and land interests
Building and improvements
Building leasehold and improvements
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
$1,811 and $5,057 and allowances of $6,630 and $6,630 in 2022 and 2021, respectively
Investments in unconsolidated joint ventures
Deferred costs, net
Other assets
Total assets (1)
Liabilities
Mortgages and other loans payable, net
Revolving credit facility, net
Unsecured term loans, net
Unsecured notes, net
Accrued interest payable
Other liabilities
Accounts payable and accrued expenses
Deferred revenue
Lease liability - financing leases
Lease liability - operating leases
Dividend and distributions payable
Security deposits
Liabilities related to assets held for sale
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred
securities
Total liabilities (1)
Commitments and contingencies
Noncontrolling interests in Operating Partnership
Preferred units
25
$
1,576,927 $
4,903,776
1,691,831
1,026,265
9,198,799
(2,039,554)
7,159,245
—
203,273
180,781
11,240
34,497
27,352
257,887
623,280
3,190,137
121,157
546,945
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
$
$
12,355,794 $
11,066,629
3,227,563 $
443,217
1,641,552
99,692
14,227
236,211
154,867
272,248
104,218
895,100
21,569
50,472
—
100,000
7,260,936
269,993
177,943
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
SL Green Realty Corp.
Consolidated Balance Sheets
(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, 2022 and 2021
Common stock, $0.01 par value, 160,000 shares authorized and 65,440 and 65,132 issued
and outstanding at December 31, 2022 and 2021, respectively (including 1,060 and 1,027
shares held in treasury at December 31, 2022 and 2021, respectively)
Additional paid-in-capital
Treasury stock at cost
Accumulated other comprehensive income (loss)
Retained earnings
Total SL Green stockholders' equity
Noncontrolling interests in other partnerships
Total equity
Total liabilities and equity
December 31, 2022
December 31, 2021
221,932
221,932
656
3,790,358
(128,655)
49,604
651,138
4,585,033
61,889
4,646,922
$
12,355,794 $
672
3,739,409
(126,160)
(46,758)
975,781
4,764,876
13,377
4,778,253
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: $41.2 million and $193.4 million of land,
$41.0 million and $336.9 million of building and improvements, $0.0 million and $0.0 million of building and leasehold improvements, $0.0 million and
$15.4 million of right of use assets, $4.4 million and $11.7 million of accumulated depreciation, $599.2 million and $574.4 million of other assets included in
other line items, $49.8 million and $418.9 million of real estate debt, net, $0.2 million and $0.8 million of accrued interest payable, $0.0 million and $15.3
million of lease liabilities, and $146.4 million and $145.2 million of other liabilities included in other line items as of December 31, 2022 and December 31,
2021, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
26
SL Green Realty Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
Year Ended December 31,
2022
2021
2020
$
671,500 $
678,176 $
81,113
74,126
826,739
80,340
85,475
843,991
804,423
120,163
128,158
1,052,744
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Operating expenses, including related party expenses of $5,701 in 2022,
$12,377 in 2021 and $12,643 in 2020
174,063
167,153
183,200
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 adjustments
(Loss) gain on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net (loss) income
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interests in the Operating Partnership
Noncontrolling interests in other partnerships
Preferred units distributions
Net (loss) income attributable to SL Green
Perpetual preferred stock dividends
Net (loss) income attributable to SL Green common stockholders
Basic (loss) earnings per share
Diluted (loss) earnings per share
138,228
26,943
89,473
7,817
215,306
—
409
93,798
746,037
(57,958)
(131)
(8,118)
(84,485)
(6,313)
—
(76,303)
5,794
(1,122)
(6,443)
(78,074)
(14,950)
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)
$
$
$
(93,024) $
434,804 $
(1.49) $
(1.49) $
6.57 $
6.50 $
Basic weighted average common shares outstanding
Diluted weighted average common shares and common share equivalents
outstanding
63,917
67,929
65,740
70,769
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)
356,105
5.03
5.01
70,397
75,078
The accompanying notes are an integral part of these consolidated financial statements.
27
SL Green Realty Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
Year Ended December 31,
2021
2020
2022
$
(76,303) $
480,632 $
414,758
Net (loss) income
Other comprehensive income (loss):
Increase (decrease) in unrealized value of derivative instruments, including SL
Green's share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Other comprehensive income (loss)
Comprehensive income
Net income attributable to noncontrolling interests and preferred units
distributions
Other comprehensive (income) loss attributable to noncontrolling interests
103,629
(1,440)
102,189
25,886
(1,771)
(5,827)
21,427
104
21,531
502,163
(30,878)
(1,042)
Comprehensive income attributable to SL Green
$
18,288 $
470,243 $
(39,743)
(1,318)
(41,061)
373,697
(43,703)
2,299
332,293
The accompanying notes are an integral part of these consolidated financial statements.
28
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
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
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
(1,536)
(38,762)
(14,950)
32,598
(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
Issuance of special dividend paid in
stock
Cash distributions declared ($6.2729 per common
share, none of which represented a return of
capital for federal income tax purposes)
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)
1,974
123,529
(2,111)
2,111
123,529
(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
Net loss
Acquisition of subsidiary interest from
noncontrolling interest
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
Contributions to consolidated joint venture
interests
Cash distributions to noncontrolling interests
(29,742)
(75)
(29,817)
(78,074)
1,122
(76,952)
96,362
(14,950)
39,974
96,362
(14,950)
525
39,974
32,034
(36,198)
(151,197)
52,164
(4,699)
52,164
(4,699)
11
525
274
4
32,030
(1,971)
(20)
(114,979)
29
SL Green Realty Corp.
Consolidated Statements of Equity
(in thousands, except per share data)
SL Green Realty Corp. Stockholders
Common Stock
Issuance of special dividend paid in
stock
Cash distributions declared ($3.6896 per common
share, none of which represented a return of
capital for federal income tax purposes)
Series I
Preferred
Stock
Shares
Par
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Noncontrolling
Interests
Total
1,961
163,115
(2,495)
160,620
(235,395)
(235,395)
Balance at December 31, 2022
$ 221,932
64,380
$ 656
$ 3,790,358
$ (128,655) $
49,604
$ 651,138
$
61,889
$ 4,646,922
The accompanying notes are an integral part of these consolidated financial statements.
30
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Operating Activities
Net (loss) income
Adjustments to reconcile net (loss) 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
Loss (gain) 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
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 and restricted cash assumed from acquisition of real estate investment
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
Year Ended December 31,
2022
2021
2020
$
(76,303) $
480,632 $
414,758
223,123
57,958
780
131
8,118
6,313
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
84,485
(287,417)
(215,506)
—
—
(5,749)
22,403
(5,676)
14,370
6,666
(21,792)
(27,343)
(30,839)
18,332
1,111
276,088
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
$
(64,491) $
(152,791) $
(86,846)
(300,770)
(184,518)
141,742
626,364
60,494
—
15,626
—
1,432
(51,367)
181,293
(302,486)
(458,140)
(88,872)
770,604
651,594
—
9,475
4,528
(10,000)
40,200
(95,695)
167,024
(70,315)
124,572
1,112,382
—
—
—
—
32,479
(360,953)
763,251
31
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Net cash provided by investing activities
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
Year Ended December 31,
2022
2021
2020
425,805
993,581
1,056,430
$
381,980 $
39,689 $
1,181,892
(292,364)
(375,044)
(1,186,828)
Proceeds from revolving credit facility and senior unsecured notes
1,524,000
1,488,000
1,495,000
Repayments of revolving credit facility and senior unsecured notes
(1,864,000)
(1,808,000)
(1,875,000)
Proceeds from stock options exercised and DRSPP issuance
Repurchase of common stock
Redemption of preferred stock
Redemption of OP units
Distributions to noncontrolling interests in other partnerships
Contributions from noncontrolling interests in other partnerships
Acquisition of subsidiary interest from noncontrolling interest
Distributions to noncontrolling interests in the Operating Partnership
Dividends paid on common and preferred stock
Other 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 increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
525
1,556
1,006
(151,197)
(341,403)
(528,483)
(17,967)
(40,901)
(4,699)
52,164
(29,817)
(16,272)
(6,040)
(25,703)
(6,631)
336
—
(15,749)
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(12,652)
(262,136)
(271,075)
(293,996)
77,874
(3,915)
(8,098)
—
51,862
(2,990)
(13,745)
(434)
—
(4,752)
(70,036)
(833)
(654,823)
(1,285,371)
(1,479,301)
47,070
336,984
(35,811)
372,795
131,365
241,430
Cash, cash equivalents, and restricted cash at end of period
$
384,054 $
336,984 $
372,795
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 and mezzanine loans
Issuance of special dividend paid in stock
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Investment in joint venture
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
32
$
$
$
169,519 $
152,773 $
201,348
5,358 $
4,405 $
2,296
— $
—
190,652
193,995
1,712,750
160,620
18,518
39,974
47,135
—
—
—
—
302
—
— $
27,586
—
9,468
60,000
121,418
7,580
9,851
—
66,837
510,000
—
—
8,372
140,855
8,744
—
119,497
122,796
—
—
1,665
32,598
—
854,437
5,593
250,000
100,000
9,014
—
SL Green Realty Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share data)
Year Ended December 31,
2022
2021
2020
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Extinguishment of debt in connection with property dispositions
Consolidation of real estate investment
Removal of fully depreciated commercial real estate properties
Sale of interest in partially owned entity
Distributions to noncontrolling interests
Share repurchase payable
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
—
—
—
—
30,359
—
—
—
—
—
391,664
64,120
53,548
119,444
19,831
4,476
358
—
—
—
—
—
66,169
—
6,613
3,779
119,725
61,990
57,938
537,344
In December 2022, the Company declared a regular monthly distribution per share of $0.2708. This distribution was paid
in January 2023. In December 2021, the Company declared a regular monthly distribution per share of $0.3108 that was paid in
cash and a special distribution per share of $2.4392 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.
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
2022
2021
2020
$
$
203,273 $
251,417 $
266,059
180,781
85,567
106,736
384,054 $
336,984 $
372,795
The accompanying notes are an integral part of these consolidated financial statements.
33
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
December 31, 2022
December 31, 2021
Assets
Commercial real estate properties, at cost:
Land and land interests
Building and improvements
Building leasehold and improvements
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
$1,811 and $5,057 and allowances of $6,630 and $6,630 in 2022 and 2021, 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 (3,670 and 3,782 limited partner common units
outstanding at December 31, 2022 and 2021, respectively)
Preferred units
34
$
1,576,927 $
4,903,776
1,691,831
1,026,265
9,198,799
(2,039,554)
7,159,245
—
203,273
180,781
11,240
34,497
27,352
257,887
623,280
3,190,137
121,157
546,945
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
$
$
12,355,794 $
11,066,629
3,227,563 $
443,217
1,641,552
99,692
14,227
236,211
154,867
272,248
104,218
895,100
21,569
50,472
—
100,000
7,260,936
269,993
177,943
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
SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands, except per unit data)
Capital
SLGOP partners' capital:
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both
December 31, 2022 and 2021
SL Green partners' capital (680 and 677 general partner common units, and 63,700 and
63,428 limited partner common units outstanding at December 31, 2022 and 2021,
respectively)
Accumulated other comprehensive income (loss)
Total SLGOP partners' capital
Noncontrolling interests in other partnerships
Total capital
Total liabilities and capital
December 31, 2022
December 31, 2021
221,932
221,932
4,313,497
49,604
4,585,033
61,889
4,646,922
$
12,355,794 $
4,589,702
(46,758)
4,764,876
13,377
4,778,253
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: $41.2 million and $193.4
million of land, $41.0 million and $336.9 million of building and improvements, $0.0 million and $0.0 million of building and leasehold improvements, $0.0
million and $15.4 million of right of use assets, $4.4 million and $11.7 million of accumulated depreciation, $599.2 million and $574.4 million of other assets
included in other line items, $49.8 million and $418.9 million of real estate debt, net, $0.2 million and $0.8 million of accrued interest payable, $0.0 million
and $15.3 million of lease liabilities, and $146.4 million and $145.2 million of other liabilities included in other line items as of December 31, 2022 and
December 31, 2021, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
35
SL Green Operating Partnership, L.P.
Consolidated Statements of Operations
(in thousands, except per unit data)
Year Ended December 31,
2022
2021
2020
Revenues
Rental revenue, net
Investment income
Other income
Total revenues
Expenses
Operating expenses, including related party expenses of $5,701 in 2022,
$12,377 in 2021 and $12,643 in 2020
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 adjustments
(Loss) gain on sale of real estate, net
Depreciable real estate reserves and impairments
Loss on early extinguishment of debt
Net (loss) income
Net loss (income) attributable to noncontrolling interests in other partnerships
Preferred unit distributions
Net (loss) income attributable to SLGOP
Perpetual preferred stock dividends
Net (loss) income attributable to SLGOP common unitholders
Basic (loss) earnings per unit
Diluted (loss) earnings per unit
$
671,500 $
678,176 $
81,113
74,126
826,739
174,063
138,228
26,943
89,473
7,817
215,306
—
409
93,798
746,037
(57,958)
(131)
(8,118)
(84,485)
(6,313)
—
(76,303)
(1,122)
(6,443)
(83,868)
(14,950)
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)
$
$
$
(98,818) $
460,261 $
(1.49) $
(1.49) $
6.57 $
6.50 $
Basic weighted average common units outstanding
Diluted weighted average common units and common unit equivalents
outstanding
67,929
67,929
69,727
70,769
The accompanying notes are an integral part of these consolidated financial statements.
804,423
120,163
128,158
1,052,744
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)
376,121
5.03
5.01
74,493
75,078
36
SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
Net (loss) income
Other comprehensive income (loss):
Increase (decrease) in unrealized value of derivative instruments, including
SL Green's share of joint venture derivative instruments
(Decrease) increase in unrealized value of marketable securities
Other comprehensive income (loss)
Comprehensive income
Net (income) loss attributable to noncontrolling interests
Other comprehensive (income) loss attributable to noncontrolling interests
Year Ended December 31,
2021
2020
2022
$
(76,303) $
480,632 $
414,758
103,629
(1,440)
102,189
25,886
(1,122)
(5,827)
21,427
104
21,531
502,163
1,884
(1,042)
(39,743)
(1,318)
(41,061)
373,697
(14,940)
2,299
361,056
Comprehensive income attributable to SLGOP
$
18,937 $
503,005 $
The accompanying notes are an integral part of these consolidated financial statements.
37
SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(in thousands, except per unit data)
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units
Common
Unitholders
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
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 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 ($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
Issuance of special distribution paid in units
Cash distributions declared ($6.2729 per common unit, none of which
represented a return of capital for federal income tax purposes)
Balance at December 31, 2021
Net loss
Acquisition of subsidiary interest from noncontrolling interest
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
Contributions to consolidated joint venture interests
Cash distributions to noncontrolling interests
Issuance of special distribution paid in units
Cash distributions declared ($3.6896 per common unit, none of which
represented a return of capital for federal income tax purposes)
$ 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)
449,754
(14,950)
738
(9,851)
11
108
32,583
(4,474)
(337,624)
12
818
1,974
123,529
(410,373)
20,489
(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)
$ 221,932
64,105
$ 4,589,702
$
(46,758) $
13,377
$ 4,778,253
(78,074)
(29,742)
(14,950)
525
39,974
11
274
32,034
(1,971)
(151,197)
1,961
160,620
(235,395)
96,362
1,122
(76,952)
(75)
(29,817)
96,362
(14,950)
525
39,974
32,034
(151,197)
52,164
52,164
(4,699)
(4,699)
160,620
(235,395)
Balance at December 31, 2022
$ 221,932
64,380
$ 4,313,497
$
49,604
$
61,889
$ 4,646,922
38
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Operating Activities
Net (loss) income
Adjustments to reconcile net (loss) 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
Loss (gain) 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
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 and restricted cash assumed from acquisition of real estate investment
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
Year Ended December 31,
2022
2021
2020
$
(76,303) $
480,632 $
414,758
223,123
57,958
780
131
8,118
6,313
228,293
55,402
824
325,462
25,195
679
32,757
(2,961)
(210,070)
(187,522)
23,794
60,454
84,485
(287,417)
(215,506)
—
—
(5,749)
22,403
(5,676)
14,370
6,666
(21,792)
(27,343)
(30,839)
18,332
1,111
2,931
1,551
(6,701)
17,234
37,164
(20,561)
(8,727)
(10,117)
20,345
(66,387)
(1,727)
(33,241)
276,088
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
$
(64,491) $
(152,791) $
(86,846)
(300,770)
(184,518)
141,742
626,364
60,494
—
15,626
—
1,432
(51,367)
181,293
(302,486)
(458,140)
(88,872)
770,604
651,594
—
9,475
4,528
(10,000)
40,200
(95,695)
167,024
(70,315)
124,572
1,112,382
—
—
—
—
32,479
(360,953)
763,251
39
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Net cash provided by investing activities
Financing Activities
Proceeds from mortgages and other loans payable
Repayments of mortgages and other loans payable
Year Ended December 31,
2022
2021
2020
425,805
993,581
1,056,430
$
381,980 $
39,689 $
1,181,892
(292,364)
(375,044)
(1,186,828)
Proceeds from revolving credit facility and senior unsecured notes
1,524,000
1,488,000
1,495,000
Repayments of revolving credit facility and senior unsecured notes
(1,864,000)
(1,808,000)
(1,875,000)
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 increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
525
1,556
1,006
(151,197)
(341,403)
(528,483)
(17,967)
(40,901)
(4,699)
52,164
(29,817)
(6,040)
(25,703)
(6,631)
336
—
(82,750)
(27,342)
(85,468)
12,477
(1,536)
(278,408)
(286,824)
(306,648)
77,874
(3,915)
(8,098)
—
51,862
(2,990)
(13,745)
(434)
—
(4,752)
(70,036)
(833)
(654,823)
(1,285,371)
(1,479,301)
47,070
336,984
(35,811)
372,795
131,365
241,430
Cash, cash equivalents, and restricted cash at end of period
$
384,054 $
336,984 $
372,795
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 and mezzanine loans
Issuance of special distribution paid in units
Tenant improvements and capital expenditures payable
Fair value adjustment to noncontrolling interest in the Operating Partnership
Investment in joint venture
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
40
$
$
$
169,519 $
152,773 $
201,348
5,358 $
4,405 $
2,296
— $
—
190,652
193,995
1,712,750
160,620
18,518
39,974
47,135
—
—
—
—
302
—
— $
27,586
—
9,468
60,000
121,418
7,580
9,851
—
66,837
510,000
—
—
8,372
140,855
8,744
—
119,497
122,796
—
—
1,665
32,598
—
854,437
5,593
250,000
100,000
9,014
—
SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2022
2021
2020
Reversal of assets held for sale
Transfer of liabilities related to assets held for sale
Extinguishment of debt in connection with property dispositions
Consolidation of real estate investment
Removal of fully depreciated commercial real estate properties
Sale of interest in partially owned entity
Distributions to noncontrolling interests
Share repurchase payable
Recognition of sales-type leases and related lease liabilities
Recognition of right of use assets and related lease liabilities
—
—
—
—
30,359
—
—
—
—
—
391,664
64,120
53,548
119,444
19,831
4,476
358
—
—
—
—
—
66,169
—
6,613
3,779
119,725
61,990
57,938
537,344
In December 2022, the Company declared a regular monthly distribution per share of $0.2708. This distribution was paid
in January 2023. In December 2021, the Company declared a regular monthly distribution per share of $0.3108 that was paid in
cash and a special distribution per share of $2.4392 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.
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
2022
2021
2020
$
$
203,273 $
251,417 $
266,059
180,781
85,567
106,736
384,054 $
336,984 $
372,795
The accompanying notes are an integral part of these consolidated financial statements.
41
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements
December 31, 2022
1. Organization and Basis of Presentation
SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green
Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were
formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its
affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as
well as 95% of the economic interest in the management, leasing and construction companies which are referred to as 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, 2022, noncontrolling investors
held, in the aggregate, a 5.39% limited partnership interest in the Operating Partnership. 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, 2022, 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)
Suburban
Office
Total commercial properties
Residential:
Manhattan
Residential
(2)
Total portfolio
13
2
5
20
7
27
1
28
9,963,138
17,888
1,685,215
11,666,241
862,800
12,529,041
140,382
12,669,423
12
13,998,381
301,996
25
11
23,961,519
319,884
2,746,241
8
4,431,456
17,046,618
44
28,712,859
—
7
862,800
17,046,618
51
29,575,659
—
1
140,382
17,046,618
52
29,716,041
9
3
24
—
24
—
24
90.7 %
91.2 %
N/A
90.7 %
79.3 %
90.3 %
89.5 %
90.3 %
(1)
(2)
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, 2022, we owned a building at 7 Dey Street / 185 Broadway that was comprised of approximately 140,382 square feet (unaudited) of
residential space and approximately 50,206 square feet (unaudited) of office and retail space that is under development. For the purpose of this report,
we have included this building in the number of residential properties we own. However, we have included only the residential square footage in the
residential approximate square footage, and have listed the balance of the square footage as development square footage.
42
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
As of December 31, 2022, we also managed one office building owned by a third party encompassing approximately 0.3
million square feet (unaudited), and held debt and preferred equity investments with a book value of $623.3 million, excluding
debt and preferred equity investments and other financing receivables totaling $8.5 million that are included in balance sheet
line items other than the Debt and preferred equity investments line item.
Partnership Agreement
In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, we
allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners,
subject to the priority distributions with respect to preferred units and special provisions that apply to 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.
2. Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or
controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities,
but where we are not the primary beneficiary, are accounted for under the equity method. See Note 5, "Debt and Preferred
Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and
transactions have been eliminated.
We consolidate a VIE in which we are considered the primary beneficiary. The primary beneficiary is the entity that has
(i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to
absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.
A noncontrolling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary
not attributable, directly or indirectly, to us. Noncontrolling interests are required to be presented as a separate component of
equity in the consolidated balance sheet and the presentation of net income is modified to present earnings and other
comprehensive income attributed to controlling and noncontrolling interests.
We assess the accounting treatment for each joint venture and debt and preferred equity investment. This assessment
includes a review of each joint venture or limited liability company agreement to determine the rights provided to each party
and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which
party has the power to direct the activities that most significantly impact the entity's economic performance. In situations where
we and our partner approve, among other things, the annual budget, receive a detailed monthly reporting package, meet on a
quarterly basis to review the results of the joint venture, review and approve the joint venture's tax return before filing, and
approve all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do
not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the
activities that most significantly impact the performance of the joint venture. Our joint venture agreements typically contain
certain protective rights such as requiring partner approval to sell, finance or refinance the property and the payment of capital
expenditures and operating expenditures outside of the approved budget or operating plan.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the
development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated
useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an
acquired entity at their respective fair values on the acquisition date. When we acquire our partner's equity interest in an
existing unconsolidated joint venture and gain control over the investment, we record the consolidated investment at fair value.
The difference between the book value of our equity investment on the purchase date and our share of the fair value of the
investment's purchase price is recorded as a purchase price fair value adjustment in our consolidated statements of operations.
See Note 3, "Property Acquisitions."
43
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022, the weighted
average amortization period for above-market leases, below-market leases, and in-place lease costs is 6.3 years, 7.4 years, and
8.1 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
construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for
occupancy, and capitalize only those costs associated with the portions under construction.
Properties other than Right of use assets - operating leases are depreciated using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives are as follows:
Category
Building (fee ownership)
Building improvements
Building (leasehold interest)
Term
40 years
shorter of remaining life of the building or useful life
lesser of 40 years or remaining term of the lease
Right of use assets - financing leases
lesser of 40 years or remaining lease term
Furniture and fixtures
Tenant improvements
4 to 7 years
shorter of remaining term of the lease or useful life
44
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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 $190.1 million, $187.3
million, and $277.5 million for the years ended December 31, 2022, 2021 and 2020, 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 years ended December 31, 2022 and 2020, we recognized $5.7 million and $5.9 million, respectively, of rental
revenue for the amortization of aggregate below-market leases in excess of above-market leases resulting from the allocation of
the purchase price of the applicable properties. 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.
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, 2022 and 2021 (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,
2022
2021
$
$
$
$
403,552 $
(190,066)
213,486 $
361,338 $
(212,191)
149,147 $
199,722
(182,643)
17,079
212,767
(210,262)
2,505
(1) As of December 31, 2022, no net intangible assets and no net intangible liabilities were reclassified to assets held for sale and liabilities related to assets
held for sale. As of December 31, 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.
The estimated annual amortization of acquired above-market leases, net of acquired (below-market) leases (a component
of rental revenue), for each of the five succeeding years is as follows (in thousands):
2023
2024
2025
2026
2027
$
(23,580)
(14,878)
(14,760)
(11,775)
(11,029)
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):
2023
2024
2025
2026
2027
$
65,130
38,982
37,298
31,381
25,058
45
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Cash and Cash Equivalents
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, 2022,
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 (loss) 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, 2022 and 2021, 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,
2022
2021
$
$
$
$
11,240 $
11,240 $
— $
11,240 $
24,146
24,146
10,606
34,752
The cost basis of the commercial mortgage-backed securities was $11.5 million and $23.0 million as of December 31,
2022 and 2021, respectively. These securities mature at various times through 2030. All securities were in an unrealized loss
position as of December 31, 2022 with an unrealized loss of $0.3 million and fair market value of $11.2 million. The securities
were in a continuous loss position for less than 12 months. 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, and was in a
continuous unrealized loss position for more than 12 months. This marketable security was sold at par during the year ended
December 31, 2022. We do not intend to sell our other 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, 2022, we received aggregate net proceeds of $7.8 million from the sale of one debt
marketable security and $3.7 million from the repayment of one debt marketable security. 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 year
ended December 31, 2020, we did not dispose of any debt marketable securities.
We held no equity marketable securities as of December 31, 2022 as we sold the one equity marketable security that was
held as of December 31, 2021 during the year ended December 31, 2022, for which we received aggregate net proceeds of
$4.2 million. We did not dispose of any equity marketable securities during the year ended December 31, 2021. We recognized
$6.5 million of realized losses and $0.6 million of unrealized gains for the years ended December 31, 2022 and 2021,
respectively.
46
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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 at December 31, 2022.
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, 2022, 2021 and 2020, $6.6 million, $6.2 million,
and $5.4 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.
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.
47
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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.
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.
48
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
We consider a debt and preferred equity investment to be past due when amounts contractually due have not been paid.
Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments become 90
days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest income
recognition is resumed on any debt or preferred equity investment that is on non-accrual status when such debt or preferred
equity investment becomes contractually current and performance is demonstrated to be resumed.
We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the
criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of
the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or
premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income
on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of
investment income.
Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
Debt and Preferred Equity Investments
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC
326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying
value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss
and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts
are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or
acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical
loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data
and external data which may include, among others, governmental economic projections for the New York City Metropolitan
area, public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset
class and adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we
may also use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be
collected for each outcome.
The evaluation of the possible credit deterioration associated with the performance and/or value of the underlying
collateral property as well as the financial and operating capability of the borrower/sponsor requires significant judgment,
which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through
“3,” from lower risk to higher risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 -
Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. Loans with risk ratings of 2 or
above are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our
expectations of current conditions, historical loss information and supportable forecasts described above or whether risk
characteristics specific to the loan warrant the use of a probability-weighted model.
Financing investments that are classified as held for sale are carried at the expected amount to be collected or fair market
value using available market information obtained through consultation with dealers or other originators of such investments as
well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management
may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its
expected amount to be collected.
Other financing receivables that are included in balance sheet line items other than the Debt and preferred equity
investments line are also measured at the net amount expected to 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.
49
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Underwriting Commissions and Costs
Underwriting commissions and costs incurred in connection with our stock offerings are reflected as a reduction of
additional paid-in-capital.
Transaction Costs
Transaction costs for asset acquisitions are capitalized to the investment basis, which is then subject to a purchase price
allocation based on relative fair value. Transaction costs for business combinations or costs incurred on potential transactions
that are not consummated are expensed as incurred.
Income Taxes
SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal
income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its
stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, SL Green will be
subject to Federal income tax on its taxable income at regular corporate rates. SL Green may also be subject to certain state,
local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on its undistributed taxable
income.
The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the
partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated
statements of operations relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating
Partnership may also be subject to certain state, local and franchise taxes.
We have elected, and may elect in the future, to treat certain of our corporate subsidiaries as taxable REIT subsidiaries, or
TRSs. In general, TRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold
directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in
Federal and state income tax liability for these entities.
During the years ended December 31, 2022, 2021 and 2020, we recorded Federal, state and local tax provisions of $3.7
million, $2.8 million, and $1.2 million, respectively. For the year ended December 31, 2022, the Company paid distributions on
its common stock of $6.17 per share which represented $2.56 per share of ordinary income and $1.17 per share of capital gains.
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.
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.
50
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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.
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.
51
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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 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.
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, Paramount Global (formerly ViacomCBS Inc.), which accounted for 5.4% of our share of annualized
cash rent as of December 31, 2022, 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, 2022.
For the years ended December 31, 2022, 2021, and 2020, the following properties contributed more than 5.0% of our
annualized cash rent from office properties, including our share of annualized cash rent from joint venture office properties:
Property
2022
Property
2021
Property
One Vanderbilt Avenue
14.1% 11 Madison Avenue
10.8% 11 Madison Avenue
245 Park Avenue
11 Madison Avenue
420 Lexington Avenue
1515 Broadway
10.0% 420 Lexington Avenue
8.3% 420 Lexington Avenue
7.8% 1515 Broadway
8.1% 1185 Avenue of the Americas
6.3% 1185 Avenue of the Americas
8.0% 1515 Broadway
5.8% 280 Park Avenue
6.7% 220 East 42nd Street
1185 Avenue of the Americas
280 Park Avenue
5.1% 919 Third Avenue
5.1% 485 Lexington Avenue
555 West 57th Street
5.3% 280 Park Ave
5.3%
5.2%
2020
8.2%
7.5%
6.9%
6.6%
5.9%
5.4%
52
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
As of December 31, 2022, 58.1% of our work force is covered by five collective bargaining agreements, and 44.1% of
our work force is covered by collective bargaining agreements that expire before December 31, 2023. See Note 19, "Benefits
Plans."
Reclassification
Certain prior year balances have been reclassified to conform to our current year presentation.
Accounting Standards Updates
In March 2022, the FASB issued ASU No. 2022-02 Financial Instruments - Credit Losses (Topic 326) Troubled Debt
Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement
guidance and, instead, requires that an entity evaluate whether the modification represents a new loan or a continuation of an
existing loan. The amendments enhance existing disclosure requirements and introduce new requirements related to certain
modifications of receivables made to borrowers experiencing financial difficulties. Additionally, ASU 2022-02 requires an
entity to disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases
within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for
entities in accordance with Subtopic 326-20, which requires that an entity disclose the amortized cost basis of financing
receivables by credit-quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for
reporting periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption
permitted. We are currently evaluating the impact of the adoption of ASU 2022-02 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 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. The Company adopted this guidance on January 1, 2022 and it did not have a material impact on the
Company's 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. The Company adopted this guidance on January
1, 2022 and it did not have a material impact on the Company's 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, 2024, which was extended
from the original sunset date of December 31, 2022 when the FASB issued ASU No. 2022-06 in December 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 impact of this guidance did not have a material impact on the Company's consolidated financial statements.
3. Property Acquisitions
2022 Acquisitions
The following table summarizes the properties acquired during the year ended December 31, 2022:
Property
245 Park Avenue (1)
Acquisition Date
September 2022
Property Type
Fee Interest
Approximate
Square Feet
Gross Asset
Valuation
(in millions)
1,782,793
$
1,960.0
53
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
(1)
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. On July 8, 2022, certain of the debtors and affiliates of SL Green entered into a Plan Sponsorship and Investment
Agreement (the "Plan"), pursuant to which SL Green became the stalking horse bidder for the property. Since the debtors did not receive any qualifying
bids for the property and the Plan was confirmed, SL Green acquired full ownership and control of the property in September 2022, at which time our
outstanding preferred equity and accrued interest balance were credited to our equity investment in the property. 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."
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
690 Madison Avenue (3)
Acquisition Date
January 2021
Property Type
Fee Interest
June 2021
September 2021
September 2021
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)
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.
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."
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
January 2020
Property Type
Fee Interest
January 2020
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.
4. Properties Held for Sale and Property Dispositions
Properties Held for Sale
As of December 31, 2022, no properties were classified as 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, which closed in the first quarter of 2022. 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.
54
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Property Dispositions
The following table summarizes the properties sold during the years ended December 31, 2022, 2021, and 2020:
Property
885 Third Avenue - Office
Condominium Units (3)
609 Fifth Avenue
1591-1597 Broadway
Disposition
Date
December 2022
June 2022
May 2022
Property Type
Fee / Leasehold
Interest
Fee Interest
Fee Interest
1080 Amsterdam Avenue
April 2022
Leasehold Interest
707 Eleventh Avenue
110 East 42nd Street
590 Fifth Avenue
220 East 42nd Street (4)
635-641 Sixth Avenue
106 Spring Street (5)
133 Greene Street (5)
712 Madison Avenue (6)
30 East 40th Street
February 2022
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
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
315 West 33rd Street - The Olivia
December 2020
December 2020
September 2020
Fee Interest
Fee Interest
Fee Interest
May 2020
Fee Interest
March 2020
Fee Interest
Unaudited
Approximate
Usable Square
Feet
Sales Price (1)
(in millions)
(Loss) Gain on
Sale (2)
(in millions)
414,317 $
300.4 $
138,563
7,684
85,250
159,720
215,400
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
100.5
121.0
42.7
95.0
117.1
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
(24.0)
(80.2)
(4.5)
17.9
(0.8)
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)
(2)
(3)
(4)
(5)
(6)
Sales price represents the gross sales price for a property or the gross asset valuation for interests in a property.
The (losses) gains on sale are net of $11.2 million, $13.7 million, and $10.5 million of employee compensation accrued in connection with the
realization of the investment dispositions during the years ended December 31, 2022, 2021, and 2020, respectively. Additionally, amounts do not include
adjustments for expenses recorded in subsequent periods.
In December 2022, the Company sold 414,317 square feet of office leasehold condominium units at the property. The Company retained the remaining
218,796 square feet of the building.
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 March 2021, the property was foreclosed by the lender.
Disposition resulted from the ground lessee exercising its purchase option under a ground lease arrangement.
55
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022
and 2021 (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
Net change in loan loss reserves
Balance at end of period (1)
December 31, 2022
December 31, 2021
$
1,088,723 $
1,076,542
62,992
37,505
(565,940)
—
193,824
13,220
(201,446)
6,583
$
623,280 $
1,088,723
(1)
(2)
Net of unamortized fees, discounts, and premiums.
Accretion includes amortization of fees and discounts and paid-in-kind investment income.
Below is a summary of our debt and preferred equity investments as of December 31, 2022 (dollars in thousands):
Floating Rate
Fixed Rate
Type
Carrying
Value
Face
Value
Mezzanine Debt
$ 144,056 $ 144,402
Interest
Rate
L + 4.95 -
12.38%
Carrying
Value
Face
Value
$ 359,366 $ 367,461
Interest
Rate
7.00 -
14.30%
Total
Carrying
Value
Senior
Financing Maturity(1)
$ 503,422 $ 1,691,780
2023 - 2029
Preferred Equity
—
—
—
119,858 119,858
6.50%
119,858
250,000
2027
Balance at end of period $ 144,056 $ 144,402
$ 479,224 $ 487,319
$ 623,280 $ 1,941,780
(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 roll forward of our total allowance for loan losses for the years ended December 31, 2022, 2021
and 2020 (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
Balance at end of period (1)
2022
December 31,
2021
$
6,630 $
13,213 $
2020
1,750
27,803
20,693
—
—
(6,583)
(37,033)
—
—
—
$
6,630 $
6,630 $
13,213
(1)
As of December 31, 2022, 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, 2022 and 2021, 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 $6.9 million, as discussed in the
Debt Investments and Preferred Equity Investments tables further below.
No other financing receivables were 90 days past due as of December 31, 2022 and December 31, 2021.
56
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of
December 31, 2022 and 2021 (dollars 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, 2022
December 31, 2021
$
$
264,069 $
352,321
6,890
644,489
437,344
6,890
623,280 $
1,088,723
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, 2022 (dollars 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
2022(1)
2021(1)
As of December 31,
2020(1)
Prior(1)
Total
$
$
— $
— $
174,985 $
89,084 $
264,069
—
—
77,109
—
—
—
275,212
352,321
6,890
6,890
— $
77,109 $
174,985 $
371,186 $
623,280
(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, 2022 and 2021
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 $9.0 million and $10.5 million as of December 31, 2022 and 2021, respectively. The Company recorded no provisions
for loan losses related to these financing receivables for the years ended December 31, 2022 and 2021, respectively. All of these
loans have a risk rating of 2 and were performing in accordance with their respective terms. One loan with a carrying value of
$5.8 million was put on non-accrual in July 2020 and remains on non-accrual as of December 31, 2022. No investment income
has been recognized subsequent to it being put on non-accrual.
57
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Debt Investments
As of December 31, 2022 and 2021, we held the following debt investments with an aggregate weighted average current
yield of 6.46%, as of December 31, 2022 (dollars in thousands):
Loan Type
Fixed Rate Investments:
Mezzanine Loan (3)
Mezzanine Loan
Mezzanine Loan (4)(5)
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mortgage Loan
Mezzanine Loan (6)
Total fixed rate
Floating Rate Investments:
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan
Mezzanine Loan (7)
Mortgage and Mezzanine Loan
Total floating rate
Allowance for loan loss
Total
December 31,
2022
Future Funding
Obligations
December 31,
2022
Senior
Financing
December 31,
2022
Carrying Value (1)
December 31,
2021
Carrying Value (1)
Maturity
Date (2)
$
— $
401,269 $
225,367 $
225,367
—
—
—
—
—
—
—
283,293
105,000
95,000
85,000
—
—
—
77,109
13,366
30,000
20,000
—
—
—
66,873
13,366
30,000
June 2023
June 2023
June 2024
January 2025
20,000 December 2029
43,521
73,000
55,250
$
$
$
$
$
— $
969,562 $
365,842 $
527,377
— $
3,761
17,924
—
—
—
275,000 $
54,000
207,134
186,084
—
—
50,000 $
8,243
46,884
39,083
—
—
21,685 $
722,218 $
144,210 $
— $
— $
(6,630) $
21,685 $
1,691,780 $
503,422 $
49,998
8,050
30,802
37,511
133,735
34,874
294,970
(6,630)
815,717
April 2023
May 2023
May 2023
July 2023
(1)
(2)
(3)
(4)
(5)
(6)
(7)
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, 2022. 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 a $12.0 million participation that was sold and did not meet the conditions for sale accounting, which is included in Other assets
and Other liabilities on the consolidated balance sheets as a result.
This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of December 31, 2022. 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.
In September 2022, the Company successfully acquired full ownership and control of the property at 245 Park Avenue. See below table and Note 3,
"Property Acquisitions."
In September 2022, the Company converted its mezzanine loan position secured by the equity interest in 5 Times Square to an equity interest in a joint
venture partnership with the existing equity holders. See Note 6, " Investments in Unconsolidated Joint Ventures."
58
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Preferred Equity Investments
As of December 31, 2022 and 2021, we held the following preferred equity investments with an aggregate weighted
average current yield of 6.55% as of December 31, 2022 (dollars in thousands):
Type
Preferred Equity
Preferred Equity (3)
Total Preferred Equity
Allowance for loan loss
Total
(1)
(2)
(3)
December 31,
2022
Future Funding
Obligations
December 31,
2022
Senior
Financing
December 31, 2022
Carrying Value (1)
December 31, 2021
Carrying Value (1)
Mandatory
Redemption (2)
$
$
$
$
— $
250,000 $
119,858 $
—
— $
— $
— $
—
—
250,000 $
119,858 $
— $
— $
250,000 $
119,858 $
112,234
160,772
273,006
—
273,006
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. On July 8, 2022, certain of the debtors and affiliates of SL Green entered into the Plan, pursuant to which SL
Green became the stalking horse bidder for the property. Since the debtors did not receive any qualifying bids for the property and the Plan was
confirmed, SL Green acquired full ownership and control of the property in September 2022, at which time our outstanding preferred equity and accrued
interest balance were credited to our equity investment in the property. See Note 3, "Property Acquisitions."
6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of December 31, 2022, the book value
of these investments was $3.2 billion, net of investments with negative book values totaling $110.2 million for which we have
an implicit commitment to fund future capital needs.
As of December 31, 2022, 800 Third Avenue and 21 East 66th Street are VIEs in which we are not the primary
beneficiary. As of December 31, 2021, 800 Third Avenue, 21 East 66th 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 $86.2 million as
of December 31, 2022 and $85.6 million as of December 31, 2021. 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.
59
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The table below provides general information on each of our joint ventures as of December 31, 2022:
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
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 (5)
11 Madison Avenue
One Vanderbilt Avenue National Pension Service of Korea / Hines Interest LP
Wharton Properties
Wharton Properties
PGIM Real Estate
Private Investors
Worldwide Plaza
RXR Realty / New York REIT
1515 Broadway
Allianz Real Estate of America
2 Herald Square
Israeli Institutional Investor
115 Spring Street
15 Beekman (6)
85 Fifth Avenue
One Madison Avenue (7)
220 East 42nd Street
450 Park Avenue (8)
5 Times Square (9)
Private Investor
A fund managed by Meritz Alternative Investment Management
Wells Fargo
National Pension Service of Korea / Hines Interest LP / International
Investor
A fund managed by Meritz Alternative Investment Management
Korean Institutional Investor / Israeli Institutional Investor
RXR Realty led investment group
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%
50.10%
31.55%
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
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
25.10%
337,000
31.55%
1,131,735
(1)
(2)
Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2022. 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.
(4)
(5)
The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
During the fourth quarter of 2022, the Company recorded a $6.3 million charge in connection with the pending sale of this investment for a gross
consideration of approximately $14.0 million, which closed in February 2023. This charge is included in Depreciable real estate reserves and
impairments in the consolidated statement of operations.
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
$501.8 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, 2022, the total of the two partners' ownership interests based on equity contributed was 40.0%. In 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, 2022 and 2021.
The 50.1% ownership interest reflected in this table is comprised of our 25.1% economic interest and a 25.0% economic interest held by a third-party.
The third-party's economic interest is held within a joint venture that we consolidate and recognize in Noncontrolling interests in other partnerships on
our consolidated balance sheet. An additional third-party owns the remaining 49.9% economic interest in the property.
In September 2022, the Company converted its mezzanine loan position secured by the equity interest in 5 Times Square to an equity interest in a joint
venture partnership with the existing equity holders. See Note 5, " Debt and Preferred Equity Investments."
(6)
(7)
(8)
(9)
60
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the years ended
December 31, 2022, 2021, and 2020:
Property
Stonehenge Portfolio
400 East 57th Street (3)
605 West 42nd Street - Sky
55 West 46th Street - Tower 46
885 Third Avenue (4)
333 East 22nd Street
Ownership
Interest Sold
Various
41.00%
20.00%
25.00%
N/A
33.33%
Disposition Date
April 2022
$
September 2021
June 2021
March 2021
January 2021
December 2020
Gross Asset
Valuation
(in millions)
1.0
133.5
858.1
275.0
N/A
1.6
(Loss) Gain
on Sale
(in millions) (1) (2)
—
$
(1.0)
8.9
(15.2)
N/A
3.0
(1)
(2)
(3)
(4)
Represents the Company's share of the gain or loss
For the year ended December 31, 2021, the (losses) gains on sale are net of $1.4 million of employee compensation accrued in connection with the
realization of the investment dispositions. There were no amounts accrued for employee compensation in the years ended December 31, 2022 and 2020.
Additionally, 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."
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, 2022 and 2021, respectively, are as follows (dollars in thousands):
61
Property
Fixed Rate Debt:
717 Fifth Avenue
650 Fifth Avenue
21 East 66th Street
919 Third Avenue
220 East 42nd Street
280 Park Avenue
5 Times Square
10 East 53rd Street
1515 Broadway
450 Park Avenue
11 Madison Avenue
One Madison Avenue (5)
800 Third Avenue
Worldwide Plaza
One Vanderbilt Avenue
650 Fifth Avenue
Stonehenge Portfolio
Total fixed rate debt
Floating Rate Debt:
1552 Broadway
11 West 34th Street
650 Fifth Avenue
121 Greene Street
115 Spring Street
2 Herald Square
100 Park Avenue
15 Beekman (8)
5 Times Square
21 East 66th Street
220 East 42nd Street
280 Park Avenue
10 East 53rd Street
One Madison Avenue
Total floating rate debt
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Economic
Interest (1)
Current Maturity
Date
Final Maturity
Date (2)
Interest
Rate (3)
December 31,
2022
December 31,
2021
10.92 %
50.00 %
32.28 %
51.00 %
51.00 %
50.00 %
31.55 %
55.00 %
56.87 %
25.10 %
60.00 %
25.50 %
60.52 %
24.95 %
71.01 %
July 2022 (4)
April 2023
April 2023
June 2023
June 2023
July 2022 (4)
April 2023
April 2028
June 2023
June 2025
September 2023
September 2024
September 2024
September 2026
February 2025
February 2025
March 2025
March 2025
June 2025
June 2027
September 2025
September 2025
November 2025
November 2026
February 2026
February 2026
November 2027
November 2027
July 2031
July 2031
5.02% $
655,328 $
655,328
5.45%
3.60%
5.12%
5.75%
5.81%
7.00%
5.35%
3.93%
6.10%
3.84%
3.94%
3.48%
3.98%
2.95%
65,000
12,000
500,000
510,000
1,200,000
400,000
220,000
782,321
267,000
—
12,000
500,000
—
—
—
—
801,845
—
1,400,000
1,400,000
467,008
177,000
1,200,000
3,000,000
—
—
—
177,000
1,200,000
3,000,000
275,000
195,493
$
10,855,657 $
8,216,666
L+ 2.65% $
193,132 $
50.00 % December 2022 (6) December 2022 (6)
January 2023 (7)
30.00 %
April 2023
January 2023 (7)
April 2023
50.00 %
L+ 1.45%
S+ 2.50%
50.00 %
51.00 %
51.00 %
49.90 %
20.00 %
31.55 %
32.28 %
May 2023
May 2023
S+ 2.10%
September 2023
September 2023
L+ 3.40%
November 2023
November 2023
S+ 2.06%
December 2023
December 2025
L+ 2.25%
January 2024
July 2025
L+ 1.50%
September 2024
September 2026
S+ 5.77%
June 2033
June 2033
T+ 2.75%
23,000
210,000
12,550
65,550
182,500
360,000
86,738
495,924
586
—
—
—
—
193,132
23,000
—
13,228
65,550
200,989
360,000
43,566
—
632
510,000
1,200,000
220,000
169,629
$
$
1,629,980 $
2,999,726
12,485,637 $
11,216,392
(136,683)
(130,516)
$
12,348,954 $
11,085,876
Total joint venture mortgages and other loans
payable
Deferred financing costs, net
Total joint venture mortgages and other loans
payable, net
(1)
(2)
(3)
Economic interest represents the Company's interests in the joint venture as of December 31, 2022. 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, 2022, 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"), Term SOFR ("S") or 1-year Treasury ("T").
62
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
(4)
(5)
(6)
(7)
(8)
This loan matured in July 2022. The Company is in discussions with the lender on a resolution.
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.
In January 2023, the maturity date of the loan was extended by one month.
This loan matured in February 2023. The Company is in discussions with the lender on a resolution.
This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
We are entitled to receive fees for providing management, leasing, construction supervision and asset management
services to certain of our joint ventures. We earned $24.0 million, $19.6 million and $15.8 million from these services, net of
our ownership share of the joint ventures, for the years ended December 31, 2022, 2021, and 2020, 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, 2022 and 2021, 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, 2022 December 31, 2021
$
15,989,642 $
14,763,874
709,299
601,552
2,551,426
768,510
533,455
1,776,030
19,851,919 $
17,841,869
12,348,954 $
11,085,876
1,077,901
1,000,356
456,537
4,968,171
1,158,242
980,595
352,499
4,264,657
19,851,919 $
17,841,869
3,190,137 $
2,997,934
$
$
$
$
(1)
As of December 31, 2022, $547.6 million of net unamortized basis differences between the amount at which our investments are carried and our share of
equity in net assets of the underlying property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the
remaining life of the underlying items having given rise to the differences.
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years
ended December 31, 2022, 2021, and 2020 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 (loss) gain on sale
Company's equity in net loss from unconsolidated joint ventures
Year Ended December 31,
2022
2021
2020
$
1,339,364 $
1,228,364 $
1,133,217
240,002
252,806
26,152
431,865
27,754
465,100
203,332
225,104
22,576
342,910
31,423
484,130
180,201
220,633
24,134
325,500
20,427
407,834
$
$
$
1,443,679 $
1,309,475 $
1,178,729
(467)
(104,782) $
(57,958) $
(2,017)
(83,128) $
(55,402) $
(194)
(45,706)
(25,195)
63
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
7. Deferred Costs
Deferred costs as of December 31, 2022 and 2021 consisted of the following (in thousands):
Deferred leasing costs
Less: accumulated amortization
Deferred costs, net
8. Mortgages and Other Loans Payable
December 31,
2022
2021
$
$
407,188 $
(286,031)
121,157 $
400,419
(275,924)
124,495
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt
investments as of December 31, 2022 and 2021, respectively, were as follows (dollars in thousands):
Property
Fixed Rate Debt:
719 Seventh Avenue
7 Dey / 185 Broadway (3)
420 Lexington Avenue
100 Church Street
Landmark Square
485 Lexington Avenue
245 Park Avenue
100 Church Street
1080 Amsterdam
Total fixed rate debt
Floating Rate Debt:
7 Dey / 185 Broadway (3)
690 Madison Avenue
719 Seventh Avenue
609 Fifth Avenue
7 Dey / 185 Broadway (3)
Total floating rate debt
Current
Maturity Date
Final Maturity
Date (1)
Interest
Rate (2)
December 31, 2022 December 31, 2021
September 2023 September 2023
4.70% $
50,000 $
November 2023 November 2023
October 2024
October 2040
June 2025
June 2027
January 2027
January 2027
February 2027
February 2027
June 2027
June 2027
7.59%
3.99%
5.89%
4.90%
4.25%
4.22%
200,000
283,064
370,000
100,000
450,000
1,712,750
—
—
—
—
288,660
—
100,000
450,000
—
200,212
34,537
$
3,165,814 $
1,073,409
November 2023 November 2023 S+ 2.85% $
July 2024
July 2025 L+ 1.50%
10,148 $
60,000
—
60,000
50,000
52,882
198,169
361,051
—
—
—
70,148 $
3,235,962 $
1,434,460
—
(34,537)
3,235,962 $
1,399,923
(8,399)
(5,537)
3,227,563 $
1,394,386
$
$
$
$
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
(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, 2022, 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 Term SOFR ("S"), unless otherwise specified.
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. Both extension options were exercised in October 2021 and 2022, respectively. Advances under the loan are
subject to incurred costs and funded equity requirements..
As of December 31, 2022 and 2021, the gross book value of the properties collateralizing the mortgages and other loans
payable was approximately $3.8 billion and $2.1 billion, respectively.
64
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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 provided us with
the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on
demand. In April 2018, we increased the maximum facility capacity from $300.0 million to $400.0 million. The facility bore
interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advanced rate. The facility
matured in June 2022 and was not extended.
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, 2022, 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, 2022, 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, 2022, the applicable spread over adjusted Term SOFR plus 10 basis points was 105 basis points for
the revolving credit facility, 120 basis points for Term Loan A, and 125 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, 2022, the facility
fee was 25 basis points.
As of December 31, 2022, we had $2.0 million of outstanding letters of credit, $450.0 million drawn under the revolving
credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $800.0 million under
the 2021 credit facility. As of December 31, 2022 and December 31, 2021, the revolving credit facility had a carrying value of
$443.2 million and $381.3 million, respectively, net of deferred financing costs. As of December 31, 2022 and December 31,
2021, the term loan facilities had a carrying value of $1.2 billion and $1.2 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).
65
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
2022 Term Loan
In October 2022, we entered into a term loan agreement, referred to as the 2022 term loan. As of December 31, 2022, the
2022 term loan consisted of a $400.0 million term loan with a maturity date of October 6, 2023. The 2022 term loan has one
six-month as-of-right extension option to April 6, 2024. We also have an option, subject to customary conditions, to increase
the capacity of the 2022 term loan to $500.0 million on or before January 7, 2023 without the consent of existing lenders, by
obtaining additional commitments from our existing lenders and other financial institutions. In January 2023, the 2022 term
loan was increased by $25.0 million to $425.0 million.
As of December 31, 2022, the 2022 term loan bore interest at a spread over adjusted Term SOFR plus 10 basis points,
ranging from 100 basis points to 180 basis points, 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, 2022, the applicable spread over adjusted Term SOFR plus 10 basis points was 140 basis points. As of
December 31, 2022, the 2022 term loan had a carrying value of $398.2 million, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2022 term loan.
The 2022 term loan 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, 2022 and 2021,
respectively, by scheduled maturity date (dollars in thousands):
Issuance
December 17, 2015 (2)
October 5, 2017 (3)
November 15, 2012
December
31,
2022
Unpaid
Principal
Balance
December
31,
2022
Accreted
Balance
December
31,
2021
Accreted
Balance
$
100,000 $
100,000 $
100,000
—
—
—
—
499,913
301,002
$
100,000 $
100,000 $
900,915
Interest
Rate (1)
Initial Term
(in Years) Maturity Date
4.27 %
3.25 %
4.50 %
10 December 2025
5
October 2022
10 December 2022
Deferred financing costs, net
(308)
(1,607)
$
100,000 $
99,692 $
899,308
(1)
(2)
(3)
Interest rate as of December 31, 2022, taking into account interest rate hedges in effect during the period.
Issued by the Company and the Operating Partnership as co-obligors.
Issued by the Operating Partnership with the Company as the guarantor.
Restrictive Covenants
The terms of the 2021 credit facility, 2022 term loan 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, 2022 and 2021, we were in
compliance with all such covenants.
66
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, the 2022 term
loan, trust preferred securities, senior unsecured notes and our share of joint venture debt as of December 31, 2022, including
as-of-right extension options, were as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Scheduled
Amortization
Principal
Revolving
Credit
Facility
Unsecured
Term Loans
Trust
Preferred
Securities
Senior
Unsecured
Notes
Total
Joint
Venture
Debt
$
5,827 $ 260,148 $
— $
— $
— $
— $ 265,975 $ 1,155,465
4,488
—
—
—
—
332,749
370,000
—
—
—
—
600,000
—
—
2,262,750
450,000
1,000,000
—
—
—
—
—
—
50,000
100,000
—
937,237
894,655
100,000
470,000
1,466,750
—
—
—
—
3,712,750
226,224
299,417
150,000
2,130,404
$
10,315 $ 3,225,647 $ 450,000 $ 1,650,000 $ 100,000 $ 100,000 $ 5,535,962 $ 6,172,915
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
Interest expense before capitalized interest
$
166,493 $
145,197 $
185,934
Year Ended December 31,
2021
2020
2022
Interest on financing leases
Interest capitalized
Amortization of discount on assumed debt
Interest income
Interest expense, net
10. Related Party Transactions
4,555
(82,444)
1,855
(986)
5,448
(78,365)
—
(1,389)
8,091
(75,167)
—
(2,179)
$
89,473 $
70,891 $
116,679
Cleaning/ Security/ Messenger and Restoration Services
Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, were
previously 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 $1.4 million, $1.7 million and $1.4 million for the years ended December 31, 2022, 2021 and 2020,
respectively.
67
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
We also recorded expenses, inclusive of capitalized expenses, of $8.6 million, $14.0 million and $13.3 million for the
years ended December 31, 2022, 2021 and 2020, respectively, for these services (excluding services provided directly to
tenants).
Management Fees
S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen
L. Green owns an interest. We received management fees from this entity of $0.6 million, $0.7 million and $0.6 million for the
years ended December 31, 2022, 2021, and 2020 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 (inclusive of the property and Summit One Vanderbilt) 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 equaled 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 have the right to tender their interests in the project upon stabilization (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 a tender of the interests will equal the liquidation value of the interests at the time, with the value
being based on the project's sale price, if applicable, or fair market value as determined by an independent third party appraiser.
In 2022, stabilization of the property (but not Summit One Vanderbilt) was achieved. Therefore, Messrs. Holiday and Mathias
exercised their rights to tender 50% of their interests in the property (but not Summit One Vanderbilt) for liquidation values of
$17.9 million and $11.9 million, respectively, which were paid in July 2022.
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 years ended December 31, 2022 and 2021 we recorded $3.0 million and $2.4 million, respectively, of rent expense
under the lease. Additionally, in June 2021, we, through a wholly-owned subsidiary, entered into a lease agreement with the
One Vanderbilt Avenue joint venture for Summit One Vanderbilt, which commenced operations in October 2021. For the year
ended December 31, 2022, we recorded $33.0 million of rent expense under the lease, including percentage rent, of which
$22.8 million was recognized as income as a component of Equity in net loss from unconsolidated joint ventures in our
consolidated statements of operations. For the year ended December 31, 2021, we recorded $5.0 million of rent expense under
the lease with no percentage rent. See Note 20, "Commitments and Contingencies."
68
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022 and 2021 consisted of the following (in
thousands):
Due from joint ventures
Other
Related party receivables
December 31,
2022
2021
$
$
26,812 $
540
27,352 $
28,204
1,204
29,408
11. Noncontrolling Interests on the Company's Consolidated Financial Statements
Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating
Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries.
Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in
our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements.
Common Units of Limited Partnership Interest in the Operating Partnership
As of December 31, 2022 and 2021, the noncontrolling interest unit holders owned 5.39%, or 3,670,343 units, and
5.57%, or 3,781,565 units, of the Operating Partnership, respectively. As of December 31, 2022, 3,670,343 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, 2022 and 2021 (in thousands):
Balance at beginning of period
Distributions
Issuance of common units
Redemption and conversion of common units
Net (loss) income
Accumulated other comprehensive income allocation
Fair value adjustment
Balance at end of period
December 31,
2022
2021
$
344,252 $
358,262
(16,272)
22,855
(40,901)
(5,794)
5,827
(39,974)
(15,749)
18,678
(53,289)
25,457
1,042
9,851
$
269,993 $
344,252
69
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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,
2022:
Issuance
Series A (4)
Series F
Series K
Series L
Series P
Series Q
Series R
Series S
Series V
Series W (5)
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
60
70.0000
1,000.00
29.12
January 2007
7.00 %
60
3.50 %
700,000
4.00 %
500,000
4.00 %
200,000
3.50 %
268,000
3.50 %
400,000
60
563,954
378,634
200,000
268,000
400,000
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
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
134.67
—
—
148.95
154.89
—
—
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 unit holder 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, 2022, no
Subsidiary Series B Preferred Units have been issued.
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, 2022 and 2021 (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,
2022
2021
$
196,075 $
202,169
—
(17,967)
(6,198)
6,033
—
(6,040)
(6,760)
6,706
$
177,943 $
196,075
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, 2022, 64,380,082 shares of common stock and no
shares of excess stock were issued and outstanding.
70
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022, share repurchases executed under the program, excluding the redemption of OP units, were as
follows:
Period
Year ended 2017
Year ended 2018
Year ended 2019
Year ended 2020
Year ended 2021
Year ended 2022
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
8,276,032
4,474,649
1,971,092
$107.81
$102.06
$88.69
$64.30
$75.44
$76.69
7,865,206
17,052,686
21,385,946
29,661,978
34,136,627
36,107,719
Perpetual Preferred Stock
We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock,
outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual
dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are
entitled to redeem the Series I Preferred Stock at any time, in whole or from time to time in part, at par for cash. In August
2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of
underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for
9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I
Preferred Units.
Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
In February 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, 2022, 2021, and 2020, respectively (dollars in
thousands):
Year Ended December 31,
2022
2021
2020
Shares of common stock issued
10,839
10,387
Dividend reinvestments/stock purchases under the DRSPP
$
525 $
738 $
16,181
1,006
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.
71
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
SL Green's earnings per share for the years ended December 31, 2022, 2021, and 2020 are computed as follows (in
thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2022
2021
2020
(Loss) income attributable to SL Green common stockholders
$
(93,024) $
434,804 $
356,105
Less: distributed earnings allocated to participating securities
Less: undistributed earnings allocated to participating securities
(2,219)
—
(2,398)
(192)
(1,685)
(137)
Net (loss) 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)
(Loss) income attributable to SL Green common stockholders (numerator for diluted
earnings per share)
$
(95,243) $
432,214 $
354,283
—
—
(5,794)
2,039
192
25,457
1,685
137
20,016
$
(101,037) $
459,902 $
376,121
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,
2022
2021
2020
63,917
65,740
70,397
4,012
—
—
67,929
3,987
705
337
70,769
4,096
441
144
75,078
The Company has excluded 1,682,236 common stock equivalents from the calculation of diluted shares outstanding for
the year ended December 31, 2022. The Company has excluded 948,017 and 1,676,825 of common stock equivalents from the
calculation of diluted shares outstanding for the years ended December 31, 2021 and 2020, respectively.
13. Partners' Capital of the Operating Partnership
The Company is the sole managing general partner of the Operating Partnership and as of December 31, 2022 owned
64,380,082 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.
72
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Limited Partner Units
As of December 31, 2022, limited partners other than SL Green owned 3,670,343 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, 2022, 2021, and 2020 respectively are
computed as follows (in thousands):
Numerator
Basic Earnings:
Year Ended December 31,
2022
2021
2020
Net (loss) 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
(98,818) $
460,261 $
376,121
(2,219)
—
(2,398)
(192)
(1,685)
(137)
Net (loss) 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
$
(101,037) $
457,671 $
374,299
—
2,590
1,822
(Loss) income attributable to SLGOP common unitholders
$
(101,037) $
460,261 $
376,121
Denominator
Basic units:
Year Ended December 31,
2022
2021
2020
Weighted average common units outstanding
67,929
69,667
74,493
Effect of Dilutive Securities:
Stock-based compensation plans
Contingently issuable units
Diluted weighted average common units outstanding
—
—
765
337
441
144
67,929
70,769
75,078
The Operating Partnership has excluded 1,682,236 common unit equivalents from the diluted units outstanding for the
years ended December 31, 2022. The Operating Partnership has excluded 948,017 and 1,676,825 common unit equivalents
from the diluted units outstanding for the years ended December 31, 2021 and 2020, respectively.
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.
The Fifth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the
Company's Board of Directors in April 2022 and its stockholders in June 2022 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 32,210,000 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
2.59 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 0.84 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
73
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
granted under the 2005 Plan prior to the approval of the fifth amendment and restatement in June 2022 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 32,210,000 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 1, 2032, 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, 2022, 6.3 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, 2022, 2021,
and 2020.
A summary of the status of the Company's stock options as of December 31, 2022, 2021, and 2020 and changes during
the years ended December 31, 2022, 2021, and 2020 are as follows:
2022
2021
2020
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Options
Outstanding
Weighted
Average
Exercise
Price
Balance at beginning of year
394,089 $
100.56
761,686 $
105.76
977,745 $
108.57
Exercised
Lapsed or canceled
Balance at end of year
—
—
(80,609)
112.14
(11,314)
(356,283)
72.30
112.56
—
—
(216,059)
118.49
313,480 $
97.59
394,089 $
100.56
761,686 $
105.76
Options exercisable at end of year
313,480 $
97.59
394,089 $
100.56
760,743 $
105.76
The remaining weighted average contractual life of the options outstanding was 1.9 years and the remaining average
contractual life of the options exercisable was 1.9 years.
During the years ended December 31, 2022, 2021, and 2020, we recognized no compensation expense related to options.
As of December 31, 2022, 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.
74
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
A summary of the Company's restricted stock as of December 31, 2022, 2021, and 2020 and changes during the years
ended December 31, 2022, 2021, and 2020 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
2022
2021
2020
3,459,363
3,337,545
3,362,456
314,995
(16,184)
3,758,174
118,255
141,515
(19,697)
3,459,363
122,759
8,693
(33,604)
3,337,545
125,064
$
$
10,133,905 $
8,497,054 $
10,895,459
16,804,931 $
9,214,531 $
734,315
The fair value of restricted stock that vested during the years ended December 31, 2022, 2021, and 2020 was $9.7
million, $11.3 million and $12.5 million, respectively. As of December 31, 2022, there was $12.5 million of total unrecognized
compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 2.0 years.
We granted LTIP Units, which include bonus, time-based and performance-based awards, with a fair value of $45.0
million and $55.0 million during the years ended December 31, 2022 and 2021, 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, 2022, there was $45.7 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 1.6 years.
During the years ended December 31, 2022, 2021, and 2020, we recorded compensation expense related to bonus, time-
based and performance-based awards of $43.5 million, $41.9 million, and $29.4 million, respectively.
For the years ended December 31, 2022, 2021, and 2020, $1.8 million, $2.1 million, and $2.2 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, 2022, 27,436 phantom stock units and 9,571 shares of common stock were issued to
our Board of Directors. We recorded compensation expense of $2.7 million during the year ended December 31, 2022 related to
the Deferred Compensation Plan. As of December 31, 2022, there were 192,638 phantom stock units outstanding pursuant to
our Non-Employee Director's Deferral Program.
75
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022, 191,845 shares of our common stock had been issued under the ESPP.
15. Accumulated Other Comprehensive Income (Loss)
The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of
December 31, 2022, 2021 and 2020 (in thousands):
Net unrealized
gain (loss) on
derivative
instruments (1)
SL Green’s share
of joint venture
net unrealized
gain (loss) on
derivative
instruments (2)
Net unrealized
gain (loss) on
marketable
securities
Total
Balance at December 31, 2019
$
(22,780) $
(7,982) $
2,277 $
Other comprehensive loss before reclassifications
(48,532)
(7,573)
(1,256)
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
Balance at December 31, 2021
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other
comprehensive income
13,897
(57,415)
14,908
16,626
(25,881)
78,300
4,702
(10,853)
(18,015)
6,874
(21,994)
23,405
—
1,021
96
—
1,117
(1,359)
(4,619)
635
—
Balance at December 31, 2022
$
47,800
$
2,046 $
(242) $
(28,485)
(57,361)
18,599
(67,247)
(3,011)
23,500
(46,758)
100,346
(3,984)
49,604
(1)
(2)
Amount reclassified from accumulated other comprehensive income (loss) is included in interest expense in the respective consolidated statements of
operations. As of December 31, 2022 and 2021, the deferred net gains from these terminated hedges, which is included in accumulated other
comprehensive income (loss) relating to net unrealized gain (loss) on derivative instruments, was ($0.5 million) and ($0.6 million), respectively.
Amount reclassified from accumulated other comprehensive income (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
76
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
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, 2022 and 2021 (in thousands):
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, 2022
Total
Level 1
Level 2
Level 3
11,240
$
—
$
11,240
$
57,660
$
—
$
57,660
$
10,142
$
—
$
10,142
$
December 31, 2021
Total
Level 1
Level 2
Level 3
24,146
$
—
$
24,146
$
1,896
$
—
$
1,896
$
29,912
$
—
$
29,912
$
—
—
—
—
—
—
$
$
$
$
$
$
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 2022, the Company recorded at fair value the assets acquired and liabilities assumed at 245 Park Avenue.
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 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
77
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of
which are classified as Level 3 inputs.
Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used
to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model
driven valuations using the significant inputs derived from or corroborated by observable market data. We do not intend to sell
these securities and it is not more likely than not that we will be required to sell the investments before recovery of their
amortized cost bases.
The fair value of derivative instruments is based on current market data received from financial sources that trade such
instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized
financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs.
The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and
cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity
investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash
equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated
balance sheets approximates fair value due to the short-term nature of these instruments. The fair value of debt and preferred
equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates
at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of
borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to
their present value using adjusted market interest rates, which is provided by a third-party specialist.
The following table provides the carrying value and fair value of these financial instruments as of December 31, 2022 and
December 31, 2021 (in thousands):
December 31, 2022
December 31, 2021
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Debt and preferred equity investments
Fixed rate debt
Variable rate debt
Total debt
$
$
$
623,280
(2)
$
1,088,723
(2)
5,015,814 $
4,784,691 $
3,274,324 $
520,148
519,669
801,051
5,535,962 $
5,304,360 $
4,075,375 $
3,336,463
800,672
4,137,135
(1)
(2)
Amounts exclude net deferred financing costs.
As of December 31, 2022, debt and preferred equity investments had an estimated fair value ranging between $0.6 billion and $0.6 billion. As of
December 31, 2021, debt and preferred equity investments had an estimated fair value ranging between $1.0 billion and $1.1 billion.
Disclosures regarding fair value of financial instruments was based on pertinent information available to us as of
December 31, 2022 and 2021. 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.
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.
78
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The following table summarizes the notional value at inception and fair value of our consolidated derivative financial
instruments as of December 31, 2022 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
$
100,000
400,000
Strike
Rate
0.212 %
0.184 %
Effective
Date
Expiration
Date
Balance Sheet
Location
Fair
Value
January 2021
January 2023 Other Assets
$
January 2022
February 2023 Other Assets
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
Interest Rate Swap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
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
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
50,000
0.633 % February 2022
February 2023 Other Assets
370,000
370,000
100,000
200,000
600,000
3.250 % December 2022
June 2023
Other Assets
3.250 % December 2022
June 2023
Other Liabilities
1.163 % November 2021
July 2023
Other Assets
1.133 % November 2021
July 2023
Other Assets
4.080 % September 2022
September 2023 Other Liabilities
50,000
3.500 %
October 2022
September 2023 Other Assets
200,000
196,717
196,717
150,000
200,000
200,000
150,000
200,000
100,000
100,000
4.739 % November 2022
November 2023 Other Assets
3.500 % November 2022
November 2023 Other Assets
3.500 % November 2022
November 2023 Other Liabilities
2.700 % December 2021
January 2024 Other Assets
4.590 % November 2022
January 2024 Other Assets
4.511 % November 2022
January 2024 Other Assets
2.721 % December 2021
January 2026 Other Assets
2.762 % December 2021
January 2026 Other Assets
3.003 % February 2023
February 2027 Other Assets
2.833 % February 2023
February 2027 Other Assets
50,000
2.563 % February 2023
February 2027 Other Assets
200,000
300,000
370,000
100,000
2.691 % February 2023
February 2027 Other Assets
2.966 %
July 2023
May 2027
Other Assets
3.888 % November 2022
June 2027
Other Liabilities
3.756 %
January 2023
January 2028 Other Liabilities
333
1,453
158
2,471
(2,465)
2,133
4,300
(3,341)
505
104
2,232
(2,225)
3,249
593
750
5,848
7,601
3,264
3,888
2,441
8,823
7,514
(1,900)
(211)
$
47,518
During the year ended December 31, 2022, we recorded a loss of $1.7 million based on the changes in the fair value of
interest rate caps we sold, which is included in Purchase price and other fair value adjustments in the consolidated statements of
operations. No interest rate caps were sold during the years ended December 31, 2021 and 2020. During the years ended
December 31, 2022, 2021, and 2020, we recorded losses of $0.3 million, $0.0 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, 2022, 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 $10.5 million. As of December 31, 2022, 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 $10.9 million as of December 31, 2022.
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 income (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 ($35.9 million) of the
current balance held in accumulated other comprehensive income (loss) will be reclassified in interest expense and ($11.6
79
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
million) of the portion related to our share of joint venture accumulated other comprehensive income (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, 2022, 2021, and 2020, respectively (in thousands):
Amount of Gain (Loss)
Recognized in
Other Comprehensive Income (Loss)
Year Ended
December 31,
Derivative
2022
2021
2020
Location of Gain (Loss)
Reclassified from
Accumulated Other
Comprehensive Income
(Loss) into Income
Amount of Gain (Loss)
Reclassified from
Accumulated Other Comprehensive
Income (Loss) into Income
Year Ended
December 31,
2022
2021
2020
Interest Rate Swaps/Caps
Share of unconsolidated
joint ventures' derivative
instruments
$ 83,162 $ 15,643 $ (51,244) Interest expense
$
4,989 $ (17,602) $ (14,569)
24,783
(19,400)
(7,977)
$ 107,945 $
(3,757) $ (59,221)
Equity in net loss from
unconsolidated joint
ventures
(673)
(7,582)
(4,911)
$
4,316 $ (25,184) $ (19,480)
The following table summarizes the notional value at inception and fair value of our joint ventures' derivative financial
instruments as of December 31, 2022 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
Interest Rate Cap
Interest Rate Cap
Interest Rate Cap
Interest Rate Swap
18. Lease Income
$
23,000
4.750 %
January 2021
January 2023
$
220,000
510,000
267,000
400,000
4.000 %
February 2022
February 2023
3.000 % December 2021
June 2023
4.000 %
July 2022
August 2023
3.500 % September 2022
September 2023
1,075,000
4.080 % September 2022
September 2023
125,000
118,670
118,670
177,000
4.080 % September 2022
September 2023
0.490 %
February 2022
0.490 %
February 2022
May 2024
May 2024
1.669 % December 2022
February 2026
—
93
4,220
1,289
3,839
6,004
698
22,669
22,652
12,576
$
74,040
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.
80
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Future minimum rents to be received over the next five years and thereafter for operating leases in effect at December 31,
2022 are as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
$
596,648
569,125
543,287
486,771
415,123
1,718,650
$
4,329,604
The components of lease income from operating leases in effect at December 31, 2022 and 2021 were as follows (in
thousands):
Fixed lease payments
Variable lease payments
Total lease payments(1)
Amortization of acquired above and below-market leases
Total rental revenue
Twelve Months Ended
December 31,
2022
2021
$
$
$
594,541 $
600,474
82,676
73,542
677,217 $
674,016
(5,717)
4,160
671,500 $
678,176
(1)
Amounts include $222.1 million and $229.2 million of sublease income for the years ended December 31, 2022 and 2021, respectively.
The table below summarizes our investment in sales-type leases as of December 31, 2022:
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, 2022 are as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total minimum lease payments
Amount representing interest
Investment in sales-type leases (1)
(1)
This amount is included in Other assets in our consolidated balance sheets.
81
Sales-type leases
3,133
3,180
3,228
3,276
3,325
200,169
216,311
(111,988)
104,323
$
$
$
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The components of lease income from sales-type leases during the years ended December 31, 2022 and 2021 were as
follows (in thousands):
Interest income (1)
Twelve Months Ended
December 31,
2022
2021
$
4,389 $
4,422
(1)
These amounts are included in Other income in our consolidated statements of operations.
19. Benefit Plans
The building employees are covered by multi-employer defined benefit pension plans and post-retirement health and
welfare plans. We participate in the Building Service 32BJ, or Union, Pension Plan and Health Plan. The Pension Plan is a
multi-employer, non-contributory defined benefit pension plan that was established under the terms of collective bargaining
agreements between the Service Employees International Union, Local 32BJ, the Realty Advisory Board on Labor
Relations, Inc. and certain other employees. This Pension Plan is administered by a joint board of trustees consisting of union
trustees and employer trustees and operates under employer identification number 13-1879376. The Pension Plan year runs
from July 1 to June 30. Employers contribute to the Pension Plan at a fixed rate on behalf of each covered employee. Separate
actuarial information regarding such pension plans is not made available to the contributing employers by the union
administrators or trustees, since the plans do not maintain separate records for each reporting unit. However, on September 27,
2020, September 28, 2021 and September 28, 2022, the actuary certified that for the plan years beginning July 1, 2020, July 1,
2021 and July 1, 2022, the Pension Plan was in critical or endangered 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, 2022. As of the date of this report, information was not yet available for the Pension Plan year
ended June 30, 2022. For the Pension Plan years ended June 30, 2021 and 2020, the plan received contributions from employers
totaling $290.1 million and $291.3 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, 2022. For the Health Plan years ended,
June 30, 2021 and 2020, the plan received contributions from employers totaling $1.5 billion and $1.6 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, 2022, 2021 and 2020 are included
in the table below (in thousands):
Benefit Plan
Pension Plan
Health Plan
Other plans
Total plan contributions
401(K) Plan
2022
2021
2020
$
$
1,952 $
1,994 $
6,386
807
6,333
849
2,480
7,688
929
9,145 $
9,176 $
11,097
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 2022, 2021 and 2020, a matching contribution equal to 100% of the first 4% of annual
compensation was made. For the years ended December 31, 2022, 2021 and 2020, we made matching contributions of $1.5
million, $1.5 million, and $1.7 million, respectively.
82
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
20. Commitments and Contingencies
Legal Proceedings
As of December 31, 2022, the Company and the Operating Partnership were not involved in any material litigation nor, to
management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined
could have a material adverse impact on us.
Environmental Matters
Our management believes that the properties are in compliance in all material respects with applicable Federal, state and
local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it
believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is
unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.
Employment Agreements
We have entered into employment agreements with certain executives, which expire between July 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 2023.
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 two 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 $3.1 million and $2.9 million as of December 31, 2022 and 2021, respectively. Ticonderoga
had no loss reserves as of December 31, 2022 and 2021.
Lease Arrangements
We are a tenant under leases for certain properties, including ground leases. These leases have expirations from 2033 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.
83
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The table below summarizes our current lease arrangements as of December 31, 2022:
Property (1)
711 Third Avenue (3)
1185 Avenue of the Americas
SL Green Headquarters at One Vanderbilt (4)
625 Madison Avenue
420 Lexington Avenue
Summit One Vanderbilt
15 Beekman (5)(6)
Year of Current
Expiration
Year of Final
Expiration (2)
2033
2043
2043
2043
2050
2058
2119
2083
2043
2048
2054
2080
2070
2119
(1)
(2)
(3)
(4)
(5)
(6)
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."
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, 2022 (in thousands):
2023
2024
2025
2026
2027
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
Total lease liabilities
Financing leases
Operating leases
$
$
$
$
3,133 $
3,180
3,228
3,276
3,325
200,169
216,311 $
(112,093)
—
104,218 $
104,218 $
52,220
58,068
58,207
58,347
58,358
1,334,570
1,619,770
—
(724,670)
895,100
895,100
The following table provides lease cost information for the Company's operating leases for the twelve months ended
December 31, 2022 and 2021 (in thousands):
Operating Lease Costs
Operating lease costs before capitalized operating lease costs
Operating lease costs capitalized
Operating lease costs, net (1)
(1)
This amount is included in Operating lease rent in our consolidated statements of operations.
Twelve Months Ended
December 31,
2022
2021
$
$
33,773 $
(6,830)
26,943 $
30,270
(3,716)
26,554
84
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
The following table provides lease cost information for the Company's financing leases for the twelve months ended
December 31, 2022 and 2021 (in thousands):
Financing Lease Costs
Twelve Months Ended
December 31,
2022
2021
Interest on financing leases before capitalized interest
$
4,555 $
Interest on financing leases capitalized
Interest on financing leases, net (1)
Amortization of right-of-use assets (2)
Financing lease costs, net
—
4,555
22,112
$
26,667 $
5,448
—
5,448
660
6,108
(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, 2022, the weighted-average discount rate used to calculate the lease liabilities was 4.51%. As of
December 31, 2022, the weighted-average remaining lease term was 28 years, inclusive of purchase options expected to be
exercised.
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, at certain
properties, ground rent expense. 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, 2022, 2021, and 2020, and selected asset
information as of December 31, 2022 and 2021, regarding our operating segments are as follows (in thousands):
Total revenues
Years ended:
December 31, 2022
December 31, 2021
December 31, 2020
Net (loss) income
Years ended:
December 31, 2022
December 31, 2021
December 31, 2020
Total assets
As of:
December 31, 2022
December 31, 2021
Real Estate
Segment
Debt and Preferred
Equity Segment
Total Company
$
745,626 $
81,113 $
763,651
932,581
80,340
120,163
$
(132,283) $
55,980 $
412,393
354,353
68,239
60,405
826,739
843,991
1,052,744
(76,303)
480,632
414,758
$
11,727,418 $
628,376 $
9,974,140
1,092,489
12,355,794
11,066,629
85
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
December 31, 2022
Interest costs for the debt and preferred equity segment include any 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 that segment does not have dedicated personnel and the use of
personnel and resources is dependent on transaction volume between the two segments, which 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, 2022, 2021, and 2020 marketing, general and administrative expenses totaled $93.8 million,
$94.9 million, and $91.8 million respectively. All other expenses, except interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
86
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2022
(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
$
283,064
$
—
$
333,499
$
19,844
18,846
—
115,769
140,946
88,276
28,873
51,093
251,523
—
291,319
450,000
78,282
452,631
—
—
—
114,077
550,819
—
791,106
90,941
431,517
—
—
—
—
—
—
—
—
—
$
225,456
$
—
$
558,955
$
558,955
$
205,225
71,773
19,844
187,542
207,386
4,499
9,068
18,846
28,873
145,445
164,291
97,344
126,217
81,265
91,729
41,304
52,043
51,093
303,566
354,659
110,402
1927
1955
1971
1988
1958
3/1998
5/1998
1/1999
10/2003
7/2004
146,707
—
438,026
438,026
150,321
1956
10/2004
Various
(20,977)
78,282
431,654
509,936
189,131
1956
12/2004
Various
5,483
114,077
556,302
670,379
232,822
1970
1/2007
Various
131,034
—
922,140
922,140
375,907
1969
1/2007
Various
8,487
90,941
440,004
530,945
182,958
1966
1/2007
Various
Life on
Which
Depreciation is
Computed
Various
Various
Various
Various
Various
100,000
27,852
161,343
(6,939)
(27,266)
20,913
134,077
154,990
41,964
1973-1984
1/2007
Various
100 Church Street
370,000
34,994
10,100
34,994
194,032
229,026
—
1,721
8,417
(1,337)
(6,240)
384
2,177
2,561
120,900
8,603
54,489
183,932
270,598
2,074
90,643
—
—
—
—
19,946
120,900
290,544
411,444
120,545
1,888
7,425
8,603
54,489
3,962
12,565
4
98,068
152,557
29,685
606
71,515
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)
107,078
281,836
115,392
397,228
4,991
1996/2012
7/2014
Various
50,000
—
41,180
45,120
46,232
228,393
210,148
45,540
27,865
—
—
—
(4,724)
41,180
41,508
82,688
4,166
45,120
232,559
277,679
4,388
49,982
1927
1910
7/2014
7/2015
Various
Various
204,968
45,540
232,833
278,373
2,658
1921
8/2015
Various
—
138,444
244,040
(138,444)
(136,174)
—
107,866
107,866
690 Madison
60,000
13,820
51,732
245 Park Avenue
1,712,750
505,458
1,394,584
—
1,734
16,224
—
—
—
28
13,820
51,760
65,580
14,597
505,458
1,409,181
1,914,639
610,711
1,734
626,935
628,669
6,664
2,044
20,877
22,567
1986
1879
1966
07/2020
09/2021
09/2022
Various
Various
Various
$
3,235,962
$ 1,697,226
$
6,181,796
$ (120,297) $
1,440,076
$ 1,576,927 $
7,621,872
$ 9,198,799
$ 2,039,554
420 Lexington
Ave
711 Third Avenue
555 W. 57th Street
461 Fifth Avenue
750 Third Avenue
625 Madison
Avenue
485 Lexington
Avenue
810 Seventh
Avenue
1185 Avenue of
the Americas
1350 Avenue of
the Americas
1-6 Landmark
Square (4)
7 Landmark
Square (4)
125 Park Avenue
19 East 65th Street
304 Park Avenue
760 Madison
Avenue (5)
719 Seventh
Avenue (6)
110 Greene Street
7 Dey / 185
Broadway (7)
885 Third Avenue
(8)
Other (9)
Total
—
—
—
—
—
—
—
—
—
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
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.
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.
In December 2022, the Company sold 414,317 square feet of office leasehold condominium units at the property. The Company retained the remaining 218,796 square feet of the building.
Other includes tenant improvements of eEmerge, capitalized interest and corporate improvements.
87
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2022
(in thousands)
The changes in real estate for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):
Balance at beginning of year
Property acquisitions
Improvements
Retirements/disposals/deconsolidation
Balance at end of year
2022
2021
2020
$
7,650,907 $
7,355,079 $
8,784,567
1,900,042
335,413
(687,563)
124,103
296,876
178,635
481,327
(125,151)
(2,089,450)
$
9,198,799 $
7,650,907 $
7,355,079
The aggregate cost of land, buildings and improvements, before depreciation, for Federal income tax purposes as of
December 31, 2022 was $6.4 billion (unaudited).
The changes in accumulated depreciation, exclusive of amounts relating to equipment, autos, and furniture and fixtures,
for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):
Balance at beginning of year
Depreciation for year
Retirements/disposals/deconsolidation
Balance at end of year
2022
2021
2020
$
1,896,199 $
1,956,077 $
2,060,560
175,465
(32,110)
174,219
(234,097)
270,843
(375,326)
$
2,039,554 $
1,896,199 $
1,956,077
88
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of SL Green Realty Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SL Green Realty Corp. (the Company) as of December 31,
2022 and 2021, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the
three years in the period ended December 31, 2022, 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, 2022 and 2021, and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 16, 2023 expressed an unqualified opinion thereon.
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.
89
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, 2022,
the Company’s investments in unconsolidated joint ventures was $3.2 billion and noncontrolling interests in
consolidated other partnerships was $61.9 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 16, 2023
90
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, 2022, 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, 2022, 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 2022 consolidated financial statements of the Company and our report dated February 16, 2023 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 16, 2023
91
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, 2022 and 2021, the related consolidated statements of operations, comprehensive income,
capital and cash flows for each of the three years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2022, 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, 2022, 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 16, 2023 expressed an unqualified opinion thereon.
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.
92
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, 2022, the Operating Partnership’s investments in unconsolidated joint ventures was $3.2 billion and
noncontrolling interests in consolidated other partnerships was $61.9 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 16, 2023
93
Report of Independent Registered Public Accounting Firm
To the Partners of SL Green Operating Partnership, L.P.
Opinion on Internal Control Over Financial Reporting
We have audited SL Green Operating Partnership, L.P.'s internal control over financial reporting as of December 31, 2022,
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, 2022, 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 2022 consolidated financial statements of the Operating Partnership and our report dated February 16, 2023
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 16, 2023
94
CONTROLS AND PROCEDURES
SL GREEN REALTY CORP.
Evaluation of Disclosure Controls and Procedures
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, 2022 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, 2022.
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, 2022 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, 2022 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.
95
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, 2022 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, 2022.
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, 2022 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, 2022 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 15,
2023, the reported closing sale price per share of common stock on the NYSE was $40.14 and there were 475 holders of record
of our common stock.
SL GREEN OPERATING PARTNERSHIP, L.P.
As of December 31, 2022, there were 3,670,343 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 15, 2023,
there were 54 holders of record and 68,563,622 common units outstanding, 64,365,509 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.
96
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, 2022, 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
Year ended 2022
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
8,276,032
4,474,649
1,971,092
$107.81
$102.06
$88.69
$64.30
$75.44
$76.69
7,865,206
17,052,686
21,385,946
29,661,978
34,136,627
36,107,719
SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
During the years ended December 31, 2022 and 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 year ended December 31, 2020, we issued 95,094 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. 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.
The following table summarizes information, as of December 31, 2022, relating to our equity compensation plans
pursuant to which shares of our common stock or other equity securities may be granted from time to time.
Plan category
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)
4,031,855 (2) $
97.59 (3)
6,570,148 (4)
—
4,031,855
$
—
97.59
—
6,570,148
(1)
(2)
(3)
(4)
Includes our Fifth 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) 313,480 shares of common stock issuable upon the exercise of outstanding options (313,480 of which are vested and exercisable), (ii)
192,638 phantom stock units that may be settled in shares of common stock (192,638 of which are vested), (iii) 2,705,720 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 (1,419,640 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 Fifth Amended and Restated 2005 Stock Option and Incentive Plan.
97
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Funds From Operations (FFO) and Normalized FFO Reconciliations
Below are reconciliations of net income attributable to our stockholders to FFO per share and Normalized FFO per share
attributable to our stockholders and unit holders for the year ended December 31, 2022 (amounts in thousands, except per share
data).
Funds From Operations (FFO) and Normalized FFO Reconciliation:
Net loss attributable to SL Green common stockholders
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net income attributable to noncontrolling interests
Less:
Loss on sale of real estate, net
Equity in net loss on sale of interest in unconsolidated joint venture/real estate
Depreciable real estate reserves
Depreciation on non-rental real estate assets
FFO attributable to SL Green common stockholders and unit holders
Add:
SLG share of unconsolidated JV loss on early extinguishment of debt
Purchase price and other fair value adjustments
Twelve Months
Ended
December 31,
2022
$
(93,024)
215,306
252,893
(4,672)
(84,485)
(131)
(6,313)
2,605
458,827
325
8,135
$
Normalized FFO attributable to SL Green common stockholders and unit holders
$
467,287
Basic ownership interest:
Weighted average REIT common share and common share equivalents
Weighted average partnership units held by noncontrolling interests
Basic weighted average shares and units outstanding
Diluted ownership interest:
Weighted average REIT common share and common share equivalents
Weighted average partnership units held by noncontrolling interests
Diluted weighted average shares and units outstanding
FFO per share:
Basic
Diluted
Normalized FFO per share:
Basic
Diluted
63,917
4,012
67,929
65,041
4,012
69,053
6.71
6.64
6.88
6.76
$
$
$
$
98
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
Dated: February 16, 2023
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.
99
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
/s/ Marc Holliday
Marc Holliday
/s/ Andrew W. Mathias
Andrew W. Mathias
Chairman of the Board of Directors and Chief
Executive Officer (Principal Executive Officer)
February 16, 2023
President and Director
February 16, 2023
/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
/s/ Carol Brown
Carol Brown
Director
Director
Director
Director
Director
Director
Director
Director
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
February 16, 2023
100
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
Dated: February 16, 2023
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.
101
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
/s/ Carol Brown
Carol Brown
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 16, 2023
President and Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Chief Financial Officer of
SL Green, the sole general partner of
the Operating Partnership (Principal Financial and
Accounting Officer)
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
Director of SL Green, the sole general
partner of the Operating Partnership
February 16, 2023
102
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(i)
(ii)
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;
Registration Statement (Form S-8 Nos. 333-127014, 333-143721, 333-189362, 333-212108 and 333-265707)
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 16, 2023, 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, 2022.
/s/ Ernst & Young LLP
New York, New York
February 16, 2023
103
Consent of Independent Registered Public Accounting Firm
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 16, 2023, 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, 2022.
Exhibit 23.2
/s/ Ernst & Young LLP
New York, New York
February 16, 2023
104
Exhibit 31.1
I, Marc Holliday, certify that:
CERTIFICATION
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)
(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
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.
Date: February 16, 2023
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
105
Exhibit 31.2
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
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)
(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
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.
Date: February 16, 2023
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
106
Exhibit 31.3
I, Marc Holliday, certify that:
CERTIFICATION
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)
(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
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.
Date: February 16, 2023
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
of SL Green Realty Corp., the
general partner of the registrant
107
Exhibit 31.4
I, Matthew J. DiLiberto, certify that:
CERTIFICATION
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)
(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
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.
Date: February 16, 2023
/s/ Matthew J. DiLiberto
Name: Matthew J. DiLiberto
Title:
Chief Financial Officer
of SL Green Realty Corp., the
general partner of the registrant
108
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
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.
/s/ Marc Holliday
Name: Marc Holliday
Title:
Chairman and Chief Executive Officer
February 16, 2023
109
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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, 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:
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 16, 2023
110
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
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:
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
February 16, 2023
111
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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, 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
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations 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 16, 2023
112
Corporate Directory
BOARD OF DIRECTORS
EXECUTIVE OFFICERS
REGISTRAR & TRANSFER AGENT
Marc Holliday
Chairman & Chief Executive Officer
Marc Holliday
Chairman & Chief Executive Officer
Andrew W. Mathias
President
Stephen L. Green
Chairman Emeritus
John H. Alschuler
Executive Chairman
Therme Group US
Edwin T. Burton, III
Professor of Economics,
University of Virginia
John S. Levy
Private Investor
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
Craig M. Hatkoff
Co-founder, Tribeca Film Festival;
Chairman, Turtle Pond Publications, LLC
AUDITORS
Ernst & Young LLP
New York, NY
Total Return to Shareholders
Betsy Atkins
CEO & Founder, Baja Corporation
(includes reinvestment of dividends)
(Based on $100 investment made. $21.00 at IPO, diluted, in dollars)
Lauren B. Dillard
Senior Managing Director,
Chief Financial Officer of
Vista Equity Partners
Carol N. Brown
Professor of Real Estate Law,
University of Richmond School of Law
TOTAL RETURN TO SHAREHOLDERS
$250
200
150
100
50
DEC
’17
’18
’19
’20
SL GREEN REALTY CORP.
S&P 500
NASDAQ INDEX
DOW JONES INDUSTRIALS INDEX
SOURCE: BLOOMBERG
’21
’22
MSCI U.S. REIT INDEX
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Computershare Investor Services
P.O. Box 43078
Providence, RI 02940-3078
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
Monday, June 5, 2023
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
A copy of our Form 10-K as filed with the
Securities and Exchange Commission is available
on our website and may also be obtained free
of charge by directing your request in writing to
SL Green Realty Corp., One Vanderbilt Avenue,
28th Floor, New York, New York 10017-3852,
Attention: Investor Relations.
SL GREEN REALTY CORP.
One Vanderbilt Avenue
New York, NY 10017
212-594-2700
www.slgreen.com