SL Green Raises FFO Guidance After Busy Q1

NEW YORK CITY—Capping a quarter that, among other things, saw it acquire its joint-venture partner's interest in what will soon be the new global headquarters for Citigroup, SL Green Realty Corp. reported first-quarter funds from operations of $1.54 per share. With Q1 FFO representing a year-over-year increase of 37 cents per share, the office REIT raised its 2014 FFO guidance by 4.6% to a range between $5.90 and $5.96, while its Q1 leasing success led the company to increase its Manhattan mark-to-market expectations for the year to a range of 7% to 10%.

SL Green credited its buyout of Ivanhoe Cambridge's interest in the 2.6-million-square-foot 388-390 Greenwich St.—which is triple-net leased to Citigroup through 2035—as well as the Q1 performance of the REIT's debt and preferred equity platform, with driving the raised outlook for FFO this year. That acquisition, which followed Citigroup's commitment to the space this past December, values the consolidated investment interest at $1.585 billion. Conversely, the REIT during Q1 also sold its 43.74% interest in a 3.7-million-square-foot Southern California office portfolio for $100 million.

Although Q1 did not produce a lease on the scale of Citigroup's—among the largest in New York City office history—it nonetheless saw SL Green signing 75 office leases in its Manhattan portfolio totaling 548,062 square feet. Same-store occupancy in the portfolio was 95.6% as of March 31, including 357,109 square feet of leases signed but not yet commenced.

Q1 also saw SL Green sign 33 office leases in its suburban portfolio, totaling 159,134 square feet. Same-store occupancy for those properties increased to 81.2% as of March 31, up from 78.9% the year prior.