Is SL Green's Demand Rebounding in Manhattan Office Leasing?

SL Green Realty SLG is experiencing a pick-up in leasing velocity after a turbulent era for Manhattan offices. Recently, SLG revealed that it has signed more than 1.9 million square feet of Manhattan office leases so far in 2025, indicating solid demand. What makes it more compelling is that SL Green still carries a leasing pipeline exceeding 1.0 million square feet, so more deals are still in the works. 

Breaking down the recent activity, in the third quarter alone, the company closed 52 leases totaling 657,942 square feet across its Manhattan portfolio. One of its flagship buildings, One Madison Avenue, saw occupancy rise to 91.2 %, thanks to three long-term leases. Among them, a new 10-year lease by Harvey AI, a 10-year expansion lease by a financial services firm and an 11-year lease with Sigma Computing. 

Other deals include a 15-year expansion lease by New York State’s Office of General Services at 919 Third Avenue, increasing its presence in that building. At 280 Park Avenue, global advisory firm Teneo Holdings renewed for 10 years, and Sagard Capital both renewed and expanded its footprint. 

All this suggests SL Green is attracting long-term tenants in its top assets, and there’s ongoing interest in its properties even amid broader office-market caution.

Still, it is worth noting that the mark-to-market on signed Manhattan office leases was 2.7% lower for the third quarter than the prior fully escalated rents on the same spaces. It was down 1.1% for the first nine months of the year, indicating that tenants are returning, but not always at the same rental levels as before.

Wrapping Up on SL Green

The leasing rebound is one of the clearest signals that SL Green’s portfolio is regaining strength. The high volume of leases and occupancy gains in marquee buildings suggests that tenants are more willing to return to Manhattan office space, at least in select properties. But the rent softness is a warning: SL Green may not command full pricing power yet.

On the earnings front, SL Green reported third-quarter 2025 funds from operations (FFO) per share of $1.58, which beat the Zacks Consensus Estimate of $1.34. That’s notably higher than the $1.13 in FFO in the same quarter last year.

Over the past six months, shares of this Zacks Rank #2 (Buy) company have rallied 9.1%, outperforming the industry’s increase of 3.9%.

Other Stocks to Consider

A couple of other top-ranked stocks from the REIT sector are VICI Properties VICI and W.P. Carey WPC, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share is pegged at $2.40, suggesting a 6.19% increase year over year.

The Zacks Consensus Estimate for W.P. Carey’s 2025 FFO per share is pegged at $4.91, calling for a rise of 4.47% year over year.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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