SL Green Realty Dips Over 2% as Q1 FFO Misses Estimates

(Bloomberg) -- SL Green Realty Corp., New York City’s largest office landlord, saw its shares fall more than 2 percent in after-hours trading after reporting first-quarter funds from operations that missed analyst estimates, even as it signed a record amount of new leases. The results highlight the persistent challenges facing the office sector despite signs of a leasing recovery.

"The bifurcation in the office market is real, with premier landlords capturing a dominant share of the leasing activity," said John Smith, a real estate analyst at XYZ Capital, in a note to clients. "However, the FFO miss shows that leasing velocity alone doesn't solve the underlying issue of higher operating costs and interest expenses."

SL Green reported a funds from operations (FFO) of $1.53 per share for the first quarter of 2026, missing the consensus estimate of $1.58. Revenue for the quarter was $223.5 million, beating the analyst forecast of $218 million. The company achieved a record 1.2 million square feet of Manhattan office leases in the quarter, bringing the portfolio to 91.2% occupancy. This compares to the Manhattan office market's overall occupancy rate of approximately 88%, according to data from CommercialEdge.

The FFO miss from a major REIT like SL Green suggests that even with strong leasing, profitability for office landlords remains under pressure. This could temper investor enthusiasm for the commercial real estate sector, which has been buoyed by hopes of a post-pandemic return to office. The performance of other major office REITs, such as Boston Properties (BXP) and Vornado Realty Trust (VNO), will be closely watched for further signs of sector-wide trends.

This article is for informational purposes only and does not constitute investment advice.