GlobeSt.com: A recent news report has REIT executives selling off stock in preparation for a major correction. You were named among them. What gives?Holliday: In terms of the market experiencing some kind of downturn, you have to assume that after it reaches dramatic highs, every sector is susceptible to some sort of pullback, and since the beginning of 2005, REITs generally have softened. But I don't think that correction had anything to do with operating fundamentals. We had a fabulous fourth quarter, and we've given guidance to our shareholders that 2005 is going to be even more profitable. Whether or not multiples in the sector as a whole will retract more, I don't know. I do know that if we keep growing our earnings as a company and delivering on what we promise, our stock price will continue to rise. End of story.

GlobeSt.com: So what was the sellback of stock all about?

Holliday: With respect to others I can't really tell you. It's generally something that's overanalyzed and overblown. For myself, I've sold options annually as part of my tax planning.

GlobeSt.com: You've been credited with upgrading SL Green's pre-REIT class B holdings. But there's still a lot of B in your portfolio. How does that reflect your strategy?

Holliday: SL Green's strategy from inception has been value-added. The question in my mind, and what drives our philosophy, is how to deploy capital to make the highest returns. If I can do that in smaller side-street B properties, I'll do it, as evidenced by our recent buy of 28 W. 44th St. That's clearly not in line with other acquisitions we did last year, but it's one that's very good for the company. That being said, since I joined the company in 1998 my overall strategy has been to reorient the business plan by continually upgrading into better properties and locations, properties in better condition, and properties with better credit quality. I look for those attributes in a deal, but the bottom line of any transaction is price and knowing that you can reposition, retenant and squeeze the most out of an opportunity.

GlobeSt.com: Do you have a typical hold?

Holliday: REITs tend to be long-term holders, so with respect to our core portfolio I operate the company as if we're going to be here forever. I'm trying to build a foundation of properties that provide increasing cash flows year after year as tenancies and rents go up. With that said, we do operate more like a private equity firm than other REITs because we're also aggressive sellers of our non-core assets. The hold there might be as short as three to five years, which gives us a full cycle to create value, realize some market upside and dispose of the property.

GlobeSt.com: Did you ever look beyond Manhattan?

Holliday: Manhattan is the best office market in the country, and you get spoiled when you do business here. I've considered expansion into other markets--Washington, DC; Boston; L.A.; San Francisco before it hit hard times--and always felt it would be a step in the wrong direction given that there is so much opportunity here and that we have no particular expertise or competitive edge elsewhere. We could go into other markets and make money--we're certainly savvy enough--but we would be just a market competitor as opposed to an above-average market competitor.

GlobeSt.com: But a lack of local market expertise is easily fixable, no?

Holliday: I don't believe it's so easily fixable. I believe in organically grown companies, and buying that expertise, without an executive management staff on the ground full-time in a market, would not make us as successful as people who have all of that.

GlobeSt.com: You've mentioned a profitable '05. Explain.

Holliday: We'll continue to be a net acquirer, as we've been every year since we went public. People say it's a great time to be a seller, but it's also a great time to be a buyer, and as long as we realize profits on dispositions and reinvest in new product, even if the market were to downshift, we'll monetize those gains and reinvest them, allowing us to ride though the dips. If you were just buying without selling, you could get trapped with a portfolio in too high a basis without having garnered the profits to pay for the new product.

GlobeSt.com: Some investors have confessed they're getting squeezed out of deals. Are you finding the same thing? Or are you the one doing the squeezing?

Holliday: Traditionally, we've gotten more than our fair share of real estate. We acquired $780 million in product last year and over a billion the year prior, so we have the ability to source good opportunities and outperform our peers. Our strategy is to focus on partnerships with people who have significant income-tax considerations and are looking for tax-efficient sales, which we can execute with our OP units. That narrows the field from dozens to a handful.

GlobeSt.com: Are you working toward acquisition targets?

Holliday: We don't have acquisition goals. Certainly if we wanted to get big just for the sake of being big we could have achieved that over the years. I don't focus on how many buildings we're going to own. I'm singularly focused on driving total returns to shareholders and driving up our earnings and internal growth, which means getting our occupancy levels above the 96% they're at today.

GlobeSt.com: Corrections aside, what's the outlook for the REIT market overall?

Holliday: I'm obviously a big fan of REITs. It would be more difficult to achieve the growth we've had and establish the franchise we've been able to create if we were in a private-equity context. First and foremost, that's because of the transparency you get with a public company. The reporting, the compliance discipline and the supplemental disclosures we put out allow investors to know almost every aspect of the portfolio and feel comfortable with what they're investing in. The REIT market is certainly going to continue to strengthen in '05 as funds flow toward the sector. And it will because people who have invested in illiquid vehicles in the past and haven't been able to get in and out of investments otherwise are drawn to REIT securities. Plus, now the sector has a track record. I can't tell you exactly where the market is going, but REIT growth will continue to be a trend in all product sectors in '05, '06 and '07.