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SL Green lifts 2026 FFO guidance after Midtown office rents surge
The REIT raised its 2026 funds from operations guidance by 26% after reporting Q2 results, with Manhattan occupancy reaching 94.7% and new-lease rents averaging $98.42 per square foot.
SL Green Realty Corp., New York City's largest office landlord, raised its 2026 guidance for funds from operations, a key cash flow metric for REITs, by 26% after reporting second-quarter earnings. The company attributed the upbeat outlook to rapidly increasing rents and profits driven by stronger demand for premium Midtown Manhattan space, with its executives noting that the pace of improvement exceeded expectations, even if the positive momentum had been forecast.
In its quarterly update, SL Green said occupancy across its Manhattan portfolio rose to 94.7%, up from 90.4% a year earlier. It also reported that rents for new leases averaged $98.42 per square foot, 18% higher than the rents paid by tenants being replaced, and the company expects to continue pushing asking rents across the portfolio.
Bisnow also highlighted that the One Vanderbilt building is SL Green's most profitable property, and that the REIT expects to add $1.20 per share of additional FFO in the updated outlook, with 80 cents attributed to One Vanderbilt. The article noted that One Vanderbilt is fully leased and that the 1,401-foot tower, valued at $4.7 billion, continues to function as a cash generator for the company.
SL Green pointed to additional leasing progress, including the 2.3 million square feet at 11 Madison Ave., where AI firm Legora Systems took final available space, the 98,000 square foot 11th floor. The broader New York office market has also strengthened, with 23 million square feet leased in the first six months of 2026, the most since 2002, and availability falling from 18% in June 2023 to 13% last month, according to Colliers as cited by Bisnow.