Thank you, everybody, for joining us, and welcome to the SL Green Realty Corp's fourth quarter 2025 earnings results conference call. This conference call is being recorded at this time of the company. We would like to remind listeners that during the call, management may make forward-looking statements. You should not rely on forward-looking statements as predictions of future events, as actual results and events may differ from any forward-looking statements that management may make today. All forward-looking statements made by management on this call are based on their assumptions and beliefs as of today. Additional information regarding the risk, uncertainties, and other factors that could cause such differences to appear are set forth in the risk factors and MD&A sections of the company's latest forum, 10K, and other subsequent reports filed by the company with the Securities and Exchange Commission. During today's conference call, the company may discuss non-GAAP financial measures as defined by Regulation G under the Securities Act. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and And the comparable gap financial measures can be found on both the company's website at www.sogreen.com by selecting the press release regarding the company's fourth quarter 2025 earnings and in our supplemental information included in our current report on Form 8-K relating to our fourth quarter 2025 earnings. Before turning the call over to Mark Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp. I ask that those of you participating in the Q&A portion of the call to please limit your questions to two per person. Thank you. I will now turn the call over to Mark Holliday. Please go ahead, Mark.

Okay. Thank you for joining us this afternoon as we kick off the year. It's been just weeks since our investor conference, but we've already hit the ground running on our business plan for 2026. We are about a month into the Mondami administration, administration and know there's a lot of pressure and focus on the mayor coming out of the gate. But it's going to take some time for the mayor of Mondominy to put an imprint on how he'll govern. He's still putting his team together, and they're at the very early stages of getting their arms around the city. We did see an early test this week with a major snowstorm here in New York, about a foot of snow in Manhattan on Sunday, and the administration did a great job getting the city back to normal quickly with the mayor being very visible and communicating effectively. At the same time, there's a lot of political maneuvering going on as we enter budget season in Albany. This is the time of year when the city makes its case to get the biggest chunk of the state budget as possible for the coming fiscal year, reflecting the city's enormous contribution to the state economy. This is especially true with a new administration eager to invest in the initiatives and promises made on the campaign trail. I know there's been a lot of talk recently about potential city budget deficits, $2 billion this coming fiscal year and up to $10 billion the following. My own view is that the city starts off every budgetary period with a gap that needs to be plugged, and this year is no different. It's not just about expenditures. On the revenue side, there's a lot of good news with tax collections up 8.5% in 2025, a big portion of which came from growth in personal income. One thing that's certain is that the business economy in New York City had an incredible year in 2025, and I believe that when the new revenue forecasts come out in the next few weeks, we'll see that the city will be projecting significant additional revenue increases that will help defray the current deficit. Remember, the city's budget is required by law to be balanced at the beginning of every fiscal year, and we continue to remain confident in the city's fiscal stability and strength. Let's not forget that New York City's credit rating is AA and was reaffirmed by S&P as recently as October, which noted that the city has the budgetary reserves needed to navigate any near-term risks. At our investor conference in December, I made the case for what I believe was shaping up to be a stellar 2026. As we sit here on January 29th, I feel the same. In short, I think 2026 is setting up to be quite an amazing year for the commercial office sector in terms of occupancy gains, rental achievement, and business growth. Given the lens I look through today, the fundamentals are strong. businesses are still leasing space and expanding growing their businesses and making lots of money the big five banks just reported increases to earnings year-over-year with profits in the fourth quarter up 6.7% and investment banking revenues up 12.6% and we're expecting when Wall Street member firms finally report fourth quarter profits they will come close to meeting or exceeding the current all-time high of 61 billion as the number stood at 48 billion through the first nine months. Between Wall Street, the big five banks reporting, and what we see going on in our own portfolio, it all reaffirms our view at Investor Conference that New York City is differentiating itself from other U.S. cities in significant ways and will continue to be the central focus of investors looking to deploy capital in debt and equity this year and beyond. Case in point, I led a contingency from SL Green that just finished a 10-day swing through Asia, where we collectively held two dozen meetings with debt and equity capital sources, investors, buyers, sellers, asset managers, and sovereigns. I can tell you that the appetite to invest in New York was as strong as I have ever seen. As we continue our travels around the world, we expect to see a similar theme play out. I expect that transaction volume for 2026 will be even higher than last year, which was $23 billion, an amount that was roughly equivalent to that of 2019. And it'll only facilitate the company's execution on our $7 billion refinance Plan and our $2.5 billion Disposition Plan. We set lofty goals for ourselves in December, as we always do, and know you all will be monitoring our progress every step of the way, as you should. We like that pressure, and we've never been more motivated to meet or exceed those goals than this year. What emboldens me is that the private markets completely get it. One point I highlighted at Investor Conference, Paramount trading at under $4 a share and then selling for nearly $7 was not lost on anyone. The private markets see economic growth in real terms, the coalescing of young and highly educated talent, and strong business demand right here in New York City. So we're going back to work on what we can control and keep putting numbers on the board until we see it reflected in the stock price, which I know we will because the disconnect now is simply too big to ignore between the value of our premier assets in this company and our share price. And to be clear, one of those premier assets is our human capital, the people of S.L. Green, who will generate more than $100 million in fee revenue from institutional investors who look to us to develop, manage, and monetize investments on their behalf. I hope everyone out there appreciates our efforts and the enormity of the plan we have for 2026, and thank you for continuing to support our company. Now I'd like to turn it over to our Chief Investment Officer, Harry Satomer, who will add some color on how we're progressing on our business plan.

Thank you, Mark. On the capital markets front, 2026 is off to a busy start. First, in the credit markets, we've seen a continued tightening of senior loans as demonstrated by our recent financing of Park Avenue Tower, which priced a spread of 1.58% at our full proceeds ask. Most notably, we saw AAAs, representing over 50% of the transaction, sell as tight as 112 basis points over the Treasury rate. While this rate is a compelling borrowing rate, I will remind everyone that in 2018 and 2019, we saw similar classes trading in the 60 basis point range over treasuries. So there's still a substantial amount of room for further rate tightening across the capital And of course, in the index, we will continue to benefit from this momentum as we execute on our $7 billion financing strategy this year, highlighted by the refinancings of One Madison Avenue, 245 Park Avenue, and our corporate credit facility, which total approximately $5 billion of the $7 billion plan. We are in various stages of executing on each of these financings, and you should expect to see us roll out a series of announcements through the balance of the year as we enjoy a tightening senior borrowing market for quality assets and sponsors. In the equity markets, we are seeing a wide array of new entrants rejoin this market as a result of improving sentiment and investors realizing the relative value of New York City commercial office properties versus alternative investment opportunities in an economic climate where hard assets are otherwise trading at premiums we had a busy new year's eve closing out our partnership with rockpoint at 100 park where we quickly realized on a substantial premium from the acquisition 11 months prior with the building now 100 leased us and rockpoint together will fund the necessary cost to complete the capitalization of the project we welcome rockpoint to our blue chip roster of reliable partners they are a great firm and we expect to do more together This was RockPoint's first major office deal in six years, a testament to the recovery in New York City. We are in negotiations on contracts and term sheets on four additional transactions in our $2.5 billion plan and look forward to sharing updates as we further our JV and counterparty roster. On that note, and to reiterate Mark's earlier color, I will add what a difference a few years makes in the private markets. After our investor conference, my phone and inbox was flooded with inbounds looking to explore participating in our capital markets plan for the year. And Mark talked about Asia, but the interest is really across the globe. I'm seeing it domestically in Canada, Europe, and the Middle East as well. I haven't seen this widespread of demand since pre-2020, and New York is clearly defining itself as far and away the city to invest capital in today. On the fund side, while we have seen stability in the senior lending markets where we are borrowers, we still are seeing inefficiencies and imbalance in the subordinate credit space where our fund is focused. We are tracking for $150 to $175 million of deployment per quarter, and the team is hard at work deploying that capital for our customers. We are also pleased to announce that we will be launching fundraising for our next fund focused on senior credit lending as we continue to bulk up our fund business. More on this to come over the next few months. Finally, last but not least, a shout out to Green Loan Services, which is now the largest active special servicer of SASB loans in the country, now servicing five of the top ten largest specially serviced loans. With that exciting news, I will pass it over to Matt.

Thanks Harry. Clearly out of the gates strong here in January, no matter how many snow days people in the market seem to want to take recently. As excited as we are for what's ahead, I want to take a minute to highlight the results we posted for the fourth quarter, where many of our operating metrics exceeded the expectations we just laid out in early December at our investor conference. From an earnings perspective, we printed an FFO beat of two cents a share, driven by higher NOI due to lower expenses, net of reimbursements, which came through both in the earnings beat and in same-store cash NOI that was better than we expected for the quarter. There was also an improved contribution from our hospitality business, which saw a solid fourth quarter of activity, and lower G&A, which as I highlighted back in December, is already low based on our AUM and relative to the comparable peer set. These positives were partially offset by lower operating profit from Summit, which is affected by the later than expected opening of the Ascent premium experience in mid-November and some additional maintenance costs we incurred related to it. And finally, for those who'd like to refer to FAD, hopefully you took note that we actually beat the initial guidance we gave back in December of 2024 by $65 million, almost 20 million of which happened in the fourth quarter alone. On the leasing front, we closed out another banner year. Congrats to Steve and his team with almost 800,000 square feet of Manhattan office leasing in the quarter, bringing the annual total to 2.6 million square feet and our three-year total to almost 8 million feet. and the strong leasing in December specifically allowed us to ultimately exceed our mark-to-market expectations for both the fourth quarter and the full year. Our same store lease occupancy objective was also met, albeit a couple weeks later than we expected. We ended the year at 93%, which is sector-leading and reflects an increase of almost 400 basis points since the lows at the end of the first quarter of 2024. Yes, we did say we would end the year at 93.2. However, some tenants in our pipeline that we expected to sign in December, decided they wanted to enjoy the holidays with friends and family versus answering Steve's phone calls and signing leases. So they waited until January, including the same store leases that were signed after January 1st in our December occupancy. We wouldn't have been at 93.2. So it was simply a matter of timing, nothing more. More importantly, with 142,000 square feet signed so far in January and a pipeline of more than a million square feet behind that, we are well on our way to achieving our 2026 leasing goals, including our same-store occupancy objective 94.8% by the end of the year. All in all, a very solid fourth quarter puts us on great footing to achieve the objectives we laid out for 2026 and for earnings growth in the years beyond. With that, turn it back over to the operator for questions.

Thank you. And to ask a question, you need to press star 11 on your telephone and wait for your name to be announced to withdraw your question please press star one one again please stand by we compile the qna roster one moment for our first question our first question will come from the line of alexander goldfarb from piper sandler your line is open uh great hey uh good afternoon uh thank you uh steve maybe just hitting ai up front uh you know We've now had AI out there for quite a while, and, you know, the market seems to be shaking out, you know.

But you see, like, law firms, for example, they're bidding aggressively for associates. You see the demand that you guys and others are showing for office, and at the same time, you know, other industries are talking about, you know, downsizing from AI. So can you just give an update how your tenants and the tenants who are driving the market, at how they are incorporating AI and are they truly downsizing any people or this is just all like part of the mix and therefore AI is part of their business, but it's not affecting their hiring plans or how much space they need to take?

Well, that's a lot of ask to get that insightful into exactly why our tenants are using AI, but I'll give you what we're seeing from a leasing perspective, which is I've not heard of a single instance of the deals that we've done, where tenants have downsized as a result of AI. Just the opposite, you know, many of the deals that we're working on, I would say, quite frankly, the vast majority of the deals we're working on have some element of growth, whether that's growth because AI is making them more efficient and more profitable and delivering more opportunities to develop their business, one can only speculate. But, you know, maybe pivoting a little bit more onto the AI demand side of the equation, you know, this AI tenant's leased a million square feet last year. There's currently 80 tech tenants in the market right now with active searches for over 8 million square feet. Of that, there are 13 known AI requirements for over 1,200,000 square feet. So to the extent that there's any space savings on other businesses, it's clearly being offset by an exploding growth of AI demand in the marketplace.

Okay. And then, Mark, on your Asian adventure, you know, it sounds like some productive meetings over there. Are there any areas of interest where the overseas investors want that surprised you? or how are they talking to you about the money in terms of are you giving them the ideas of, hey, we can invest here and there, or they're saying, hey, here are the areas that we want to focus on and this is where we'll give you more money. I'm trying to figure out, you know, which way the horse race is being driven and if it's conjuring up some new opportunities or maybe just reaffirming your existing game plan.

Well, I think the way I would characterize it is the way, you know, I've seen it in the past, but really only, you know, several years out of three decades where the money inflows into these institutions seems to be so great and real estate has to, you know, sort of maintain its certain percentage of total AUM for these different investors. And many of these, you know, country investors have kind of maxed out their investments in their local economies, and they really can't invest more. So they, A, are, you know, almost forced, if you will, to look outside their borders. And when they do that, it was quite evident to me that there's really only a couple of areas that they feel comfortable investing in worldwide and certainly in the U.S. And the constant theme of New York City, Midtown Manhattan, you know, real estate being sort of the real estate equivalent of U.S. Treasuries, I think really resonated in terms of, you know, risk adjusted downside safety and a path towards real returns where you can still earn double digit returns on good core real estate assets because interest rates in the U.S. are still relatively high and cap rates are still relatively high. And that translates well for a lot of these investors. So there was a lot of our counterparties, you know, telling us that they are looking to us to help them deploy capital in various different ways, debt and equity, development and core assets. You know, summer is more opportunistic. In some cases, people have interest in the summit platform and sponsoring growth in the summit platform and various markets, et cetera. So it was, you know, it's just great meetings. Our franchise in those markets is very well known and highly regarded. You know, there seems to be a lot of capital deploy in 26 and notwithstanding some of the geopolitical events with you know particularly with tariffs you know both ways you know US tariffs of foreign goods and foreign tariffs are American goods it seems that there's still a desire to you know convert money to dollars and put it to work in New York City and in many cases with us so it was a very good trip all around thank you one moment for our next Next question, our next question will come from the line of John Kim from BMO Capital

Markets. Your line is open.

John Kimbler Thank you. On the new disclosure that's provided on page 31, Matt, on the difference between the physical and economic occupancy, I guess you would suggest that there is another $78 million of rental revenue coming to SO Green from leases that have already commenced. So I'm wondering when, as far as timing, when you will recognize that on both a gap and cash basis?

That's about the most specific question I've gotten in a while. Look, you know, we gave economic occupancy as a new stat we would be referring to back in December. So, you know, and we guided to where it was going to end 2026, property by property. Obviously, you need a starting point for that, so we threw it into December. Remember, how the growth from the December number, December 25 to December 26 number, plays out. We don't give quarterly guidance, so I'm not going to layer it in, you know, first quarter, second, third, and fourth. But we gave you, you know, full-year NOI guidance. It translates into significant same-store NOI growth, 3.5% to 4.5% over the course of the year. So, you say it's coming in over the course of the year. How it bleeds in, somewhat out of our control because the tenants control when they finish their space and can move in, and that's what triggers revenue recognition. So for that, among other reasons, you know, we give it on an annual basis and can't give you how it bleeds in over the course of the year.

But can you give us, like, a rough estimate? Like, would half of it come this year and half the following year?

I cannot.

Okay. My second question for you is the FAD app performance that you mentioned, $20 million this quarter, what drove that? Is any of this timing related? and how does that impact your views on the dividend?

How does it impact the view?

What was I – On maintaining the dividend.

So FAD and dividend are unrelated topics, so I'll start with that. As it relates to FAD outperformance, I think part of that is, you know, our being very vigilant about capital spend and also gives evidence to the, you know, the unpredictability of FAD, which is why office companies like us don't guide to it, because it's largely out of our control when it comes to the tenant's capital spend. If they elect to build out space and call capital, that, you know, we have to fund that. If they defer or just spend slower, we can't control that. So I think the combination of those things plus just FFO outperformance, you know, your earnings outperformance all drove the overall FAD beat. As it relates to dividend, you know, FAD is not the governor of dividend. FAD is a stat just like FFO is. And so the dividend is an accumulation of, you know, taxable income items, and that's what will drive our dividend on a go-forward basis.

Great. Thank you.

Thank you. One moment for our next question. Our next question will come from the line of Nicholas Uliko. from Scotiabank. Your line is open.

Thanks. I guess just going to the asset sales guidance that you've given the $2.5 billion and, you know, you gave some NOI impact this year that was expected. Is it right to think that that's, you know, the timing of the asset sales is more of a back half of the year impact? And can you just give us any, you know, sort of range on how to think about cap rates for the different asset classes that you're selling?

So you're right to say that it's mostly back half. You know, we do have some asset sales. Harrison commented that there are term sheets, contracts, and you know, advanced discussions. So maybe we can get some of those wrapped up, you know, in the first half of the year. But by and large, a lot of it is second half. And, you know, we're selling probably the most diverse group of assets we ever have. We have some stabilized office, we have development sites, we have residential, we have retail, a little bit of everything. I wouldn't hazard to, you know, put a blanket cap rate on all of that. And when you talk about a development site, there is no cap rate. I don't know if Harrison, you want to add anything to that?

No, I think that's right. You know, for also for competitive purposes, I wouldn't want to put a cap rate out there that you want us negotiating the best price but you know I would add that we put out that business plan only a couple weeks ago we have a very high degree of confidence in executing on that plan that's why we put it in front of everybody and we are hard at work at getting that plan done and as I mentioned four of those deals are already in term sheet or contract negotiations so hopefully some more news to come over the coming months okay Okay, thanks.

And then I just wanted to follow up on the dividend question. I know what you mentioned on, you know, FED and how it doesn't impact necessarily the thinking on the dividend, but I just wanted to see if you could give us a little bit more of the thought process of the board, because, you know, ahead of the March decision on the dividend, you know, how the board's thinking about it, because, you know, we're all seeing that FFO and likely FED is going down this year, And so it kind of raises questions about the dividend. Any additional commentary there would be helpful?

Yeah, I would, you know, it's premature to have a dividend conversation right now. We'll take it up with the board. I can tell you the board doesn't just look at the next quarter, two or three. The board takes a holistic look, and we're going to look at things in the coming years. I think 27 is going to be a really strong year. So, you know, we don't peg the policy quarter to quarter. It's intended to be underpinning of a long-term plan of investment and harvesting, repatriation, creating free cash flow. And one of the biggest parts of that plan now, which is different than it used to be, is the creation of, you know, pure net fee income, unlocking the value in the platform over and above just our asset value. And that, you know, money, if you will, is kind of in place of what used to be DPE income. And I think you get a much higher multiple. It's much stickier. And it's, you know, core to who we are to build up this asset management business further. You heard Harry talk about the launching of a new fund, which we will do in 26. And that's not even in, you know, those numbers. So I feel very good about the earnings trajectory of the company as, you know, all this development we did and all these leases start, you know, activating and coming into recurring FFO in 26, maybe back half and certainly beyond, 27 and beyond. And, you know, those are the kinds of things we'll look at in addition to taxable income and in addition to cash flow when setting a dividend policy. So, you know, I think what you're hearing is we're generally optimistic as it relates to the business plan where we peg the dividend, you know, at a moment in time is something the board will take up in, I guess, March or April. Yeah, March, March. And, you know, there's not a lot more I can add, you know, to that. But, you know, you mentioned something about, you know, declining or falling earnings this this portfolio is without question the best portfolio of assets with the highest earning capacity this company has ever had. And at the end of our $7 billion refinancing plan, our $2.5 billion disposition plan, you know, the balance sheet's going to be exactly set to where we want it to be at the end of this year. And we're, you know, poised for opportunity and growth, you know, earnings growth and value growth. So, you know, the dividend will have to suss out in March. But, you know, this is not a company that feels like it's in a moment of decline. I think we're in a moment of expansion on all levels. And, you know, I think the private market gets that. And I hope the public market, you know, comes to realize the great successes we're having in this market and follow suit with support. But until then, you know, we're happy, it's a necessity that we have extraordinary support from global investors.

All right. That's helpful.

Next question on the offline of Anthony Pallone from JPMorgan. Your line is open.

Great. Thanks. And, Matt, maybe just to clarify, just to make sure you got this right. Right, so this new occupancy or economic occupancy, you gave us the 86.7% for year-end 2025 for the same store. So the number in your guidance for 26, is that apples to apples with that for year-end 26, or is that the average across the year? Just to make sure we got this right.

The economic occupancy we published at the investor conferences, your question, Tony? Was that end-of-year average? That was average. What's the year-end? That was average. Year-end is higher. Year-end is higher.

Okay. But that is apples, apples, then with this 86.7 that you now gave us.

Well, the published number is as of the end of December. We guided to at the investor conference for 26 was an average. The year-end 26 number would be higher. But in order to kind of get people to an average annual guidance to give a year-end number, it's not really given a picture as to how the earnings growth might look over the course of the year. We did an average by building.

Okay. Got it. That's helpful. And then just a second one for me, just curious. You know, Worldwide Plaza has been in the news a bit. Can you remind us, like, what that FFO impact is? Is, like, is that thing running at an FFO loss or is interest in, like, penalty interest? Like, how does that work for your earnings right now?

It generates $7 million of FFO.

Got it. Thank you, then.

Our next question will come flying to Blaine Heck from Oswego. Your line is open.

Great, thanks. Mark, just wanted to follow up on your trip to Asia and dig into the drivers of the increased appetite since foreign investment has been lower over the past few years. Weakness in the dollar has been a big headline over the past few days and weeks. So I hear you on rebalancing domestic versus international exposure for those clients and them searching for higher yields. But how much of a part of their increased appetite do you think a weaker dollar is playing, if at all? And if that continues, are you expecting that to provide you access to additional partners for fund investments or acquisitions? Or does that just mean more competition for acquisitions? for assets and just higher values across the market.

The second part of that question you said with respect to the valuation push, what exactly did you ask?

Yeah, just, you know, does that increase appetite for investment in Manhattan? Just do you think of that as providing you access to additional partners for fund investments or acquisitions, or does that just mean more competition for assets and higher values across the market?

Okay. So, you know, it's interesting. When the dollar was strengthening and other currencies were weakening, you could have made an argument that maybe U.S. assets would become less attractive, but we didn't experience that because at that moment in time, people wanted to get their foreign currency into U.S. currency because they felt that, you know, U.S. had great real growth prospects. And once that money is here, I think the intention with a lot of these investors is it stays here and gets reinvested. You know, they're not just rifle shotting certain asset investments opportunistically, but they're looking to set up, you know, investment platforms in, you know, domestic markets here in the U.S. And, you know, there's a – at that moment in time, there was kind of a intentional directive to diversify some money into, you know, what was then a strengthening dollar. And I didn't see that hurt our ability to raise money really at all. And plus, a lot of these sophisticated investors have hedging strategies that, you know, I think mitigate some of that risk. Now, with the dollar depreciating, it obviously makes the assets, you know, somewhat, you know, less expensive. But also remember, that means rates are rising in their home countries. So that relative advantage we had, the U.S. rate versus, you know, home country rate, is probably, you know, narrowing a bit, but still decidedly in favor of U.S. And, you know, yes, I think the appetite picks up more with the depreciating dollar, which, you know, creates more demand, will certainly, you know, push pricing, but nothing pushes pricing as much as interest rates. You know, if you're looking for a push on pricing, you know, maintaining or falling rates, I think, would have, you know, an explosive effect on values in the city. You know, right now, maintenance of rates, I think it's a fair market, and we outcompete in that market. And I think, you know, it makes it more attractive for investors to invest. And, you know, there was very little talk about the exchange ratio being a barrier in any way. And, you know, in some cases, it was certainly a benefit. So, you know, I think it's a good trend, but I don't want to give you the implication that if that reversed itself and the dollar started strengthening again, that I would expect a dramatic tapering off because I still think there's a diversification play, a global diversification play into, you know, markets where they're underrepresented in investments. I think that's the number one reason we're seeing these money flows, you know, in our direction. Harry, you have any thoughts on that?

Yeah, the only other thing I would add is what you heard me talk about in December and in my intro, which is just the relative value of commercial office properties in New York. A lot of what we're hearing from investors, to Mark's point about waiting, They're heavyweight in data centers and other asset classes that have seen big appreciation in pricing over the past three to four years. They haven't seen, we haven't seen that type of appreciation for the past few years in commercial office assets. And that's what's enticing them into this market is the relative value versus other opportunities and other asset classes.

Okay, very helpful commentary. Second question, you have a significant disposition target for 26 and a solid occupancy trajectory forecast for the year. Can you give us any idea of how much of the occupancy gain is related to selling off under leased buildings and how much of the gain is related to organic leasing of vacancies throughout the portfolio?

It's Matt. I would say the occupancy objective is very nominally, if at all, affected by asset sales. You know, there are some asset sales that we have in there that are lower occupancy that we could not consummate and still meet our objective based on the leasing trajectory we're seeing. So, you know, will it have an effect? Potentially. Was it factored into our objective 94.8, achieving it or not? So we could do without the disposition plan and likely achieve our target.

You know, Blaine, I would point you in the direction of a slide we used in the investor conference. I thought it was a pretty impactful slide, which listed, I think, you know, a subset of mostly all our buildings or material buildings, if you will, in terms of current occupancy and where we expected to be at the end of the year. And those are same store, obviously, between 25 and 26. and, you know, it showed not only in almost every case, maybe not every case, but the vast majority of cases, occupancy gains being projected, which underlie the march forward from 93 to 94 plus in 2026. But, you know, shows you two stories. One, we're operating at the highest levels, I think, in the market at getting to 95 and above on a major segment of our portfolio. But still, we want to see those properties 100% leased. You know, people say, well, it's impossible, frictional, whatever. We've got properties that are 99 and 100% leased. And in a tight market, you know, I think 97 plus is not unachievable. We've achieved it in the past. And every 100 basis points for this company has a dramatic impact on the bottom line. So, you know, I just think, you know, referring back to that slide will give you a good visualization of where we see the occupancy gains coming from.

Great. Thank you, Gus. Thank you. One moment for our next question. And our next question will come from the line of Brendan Lynch from Barclays. Your line is open.

Great. Thanks for taking my questions. Mary, one for Harry. I appreciate the color on the spreads tightening over the past couple of years. What do you think could get us back to the tight spreads of the pre-COVID era? Is that more macro related or more off the sentiment related? And kind of what's the house view on the trajectory and timeline of spreads tightening going forward?

Yeah, I think it's more macro and relative yield focused. I will say, you know, just even through the Park Ave Tower financing, that was tightening like up to the last hour of bidding out those bonds. And, you know, I think we're going to continue to see a trajectory over the next six to 12 months that the spreads like you saw us go from 11 Madison into Park Ave Tower, you'll next see one Madison and then you'll see 245 Park. you'll continue, so long as we stay on the current trajectory, to see those spreads tighten as we go throughout the year.

And a lot of that is new entrants coming into the bond market that are recircling. I met with someone this morning, North American based investor, coming back into the bond market that wasn't there for quite some time.

So we're going to continue to see that momentum and that will continue to tighten the spreads.

Great. That's helpful. And maybe another question on the trends within concessions. It looked like the TI packages and free rent ticked up a bit in the second half of the year, despite the really strong demand that you guys are seeing. How should we think about those packages going forward?

You know, broadly speaking, I'd say much of what we saw last year continues today, which is concessions have been very stable. So there's been opportunities to tighten them up in certain instances where – whether it's on certain parts of the market where there's a lot of landlord leverage, particularly on renewals and the sort of – call it the small to medium-sized tenants. We're seeing some improvement on the concessions there. But I think, you know, what you'll see this year is free rent will start to come down a little bit, and I think TI, you know, will be the last thing to change, although, again, on the small to midsize, and particularly on the real size, we've got the leverage to be able to improve and reduce the amount of TI that we're giving on those transactions. And I think what you saw this particular quarter is simply a reflection of the complexion of You know, if there were a lot of bigger deals, new transactions, then those naturally carry the bigger TI packages. Great. Thank you for the color.

Thank you. One moment for our next question. Our next question will come from Manous Abek from Evercore ISI. Your line is open.

Thanks for taking the question. Just wanted to see if we can provide some color on the pipeline specifically for leasing demand outside of Park Avenue.

The pipeline, despite all of that big leasing in the fourth quarter, we've kept the pipeline full, over a million square feet of pipeline. I think what is most notable, and I think this is important for people to hear, of the over a million square feet of pipeline, 800,000 square feet of that pipeline are leases that are out. So these are not just, you know, hoped for transactions that will convert. 800 of the million square feet are leases that are in negotiation, and many of them are in close-to-execution form. Also within that pipeline is 900,000 square feet of new tenants as opposed to renewals. And then, you know, as far as the types of tenants, heavily weighted towards finance. Half the pipeline is financial service businesses, the balance being tech and legal tenants.

Gotcha. And maybe a quick follow-up, just like how would you classify, like, 6th Avenue or 3rd Avenue right now, like just in that mix?

Sixth Avenue is the new Park Avenue. You know, Park Avenue is the tightest market in the country. Sixth Avenue posted some really big deals. You're seeing rents rise dramatically on the avenue, given the tightening of supply. What we've experienced in particular, I think, is a really good case study of what the strengthening marketing on Sixth Avenue is. Many of you have inquired about the vacancy or the rollover that we had at 1185-6 over the past couple of years. We had four big tenants. that rolled out of the building, or in one case, one more tenant still to go. Over almost 700,000 square feet of that, covering 25 floors of space. Since that period, we've leased 434,000 square feet. We have leases out on 135,000 square feet, deals pending on 131,000 square feet, which leaves us only 24,000 square feet to deal with of that almost 700,000 square feet of roll, which I think is an amazing case study to the strengthening of the sub-market, to say nothing of the strength of the leasing team, of course.

Gotcha. I appreciate it.

One moment for our next question. Our next question on Confline of Ronald Camden from Morgan Stanley. The line is open.

Hey, great. Just two quick ones. On the same store and OI guide of 4%, But, you know, I think last year there was some headwinds from sort of Summit Operator. I was just curious if we could sort of decompartmentalize that guide in terms of the benefit from Summit versus occupancy versus other factors, just to get a sense of that 4%. Thanks.

I would say, you know, Summit has an impact on it, but it's not going to be the main driver of it. clearly the driver is, you know, occupancy increases. As I said in my earlier commentary, you know, we've driven same-store occupancy from, you know, up 400 basis points in a period of, you know, three, seven quarters. That starts to flow through. That's why we show economic occupancy as a new metric ticking forward with still growth thereafter. That translates into, Obviously, same-story NOI growth of, you know, the 3.5% to 4.5% this year and, you know, 10% plus in 2027. You know, the summit effect, it had an effect, so it'll be, you know, helpful in 2026, clearly, to have Ascent back up and running and summit back on a great footing, but it's not the driver.

Helpful. So my second one is just going back to the dividend payout ratio. I appreciate FAD is not the right sort of way to look at it. But I guess my question is, you know, when you think about sort of the cash flow statement that you guys published and that is out, there's always sort of a big delta between the operating cash flow and the dividend payment because you have a lot of JVs. I guess the question is, like, how do we think about the recurring cash flow payments of the JVs? And is that something that when the board is thinking about the dividend payment, is that the right way to sort of think about the consideration versus fad?

Well, I look at cash flow, and cash flow is comprised for this company of operating cash flow and the gains we take on sales. Because we are an active seller of real estate. This is – we are just not a buy and hold company. And if you evaluate us and our dividend only from the, you know, lens of buy and hold, which I don't, you know, a non-active way of managing the real estate, then, you know, we'd have to look at different metrics as a board. But as a board, we look at, you know, buying things that are, it's like unformed clay in some cases, you know, breeding new life into all the buildings, developing new buildings, enter into transactions to create high IRR, and we often will monetize. I think we've sold much more real estate than we currently own, and we own 30 million square So that's saying something. And to only look at one metric for purposes of total return and dividend, et cetera, coverage, I just would, you know, my opinion, and I think the board's opinion would be don't look at it that way. look at it in its totality for all the revenue we generate because all of that revenue which you know often is taxable is what goes which I think is what Matt saying is that's our metric and that's our barometer for setting of the dividend we don't just occasionally harvest gains you know this year it's a two and a half billion dollar plan last year was you know a couple of billion over year before that it was a five billion dollar plan I mean this is what we do and who we are you guys know that you absolutely know green buys improves develops stabilizes harvest move on does it again I've been doing it here at this company for 27 years and it has not changed much over the 27 years the assets have just gotten better the numbers bigger but you know the culture and the ethos the same so you know I it's not a debate per se it's just this is how we look at it at at the board level. And, you know, we've been able to, you know, keep as good a dividend policy, I think, over those years as we possibly could, given the ups and downs of the markets. And, you know, we're just going to stay on that team and keep, you know, evaluating it through that, you know, through that telescope of the different types of businesses we do and the contributory cash flows to that business, the taxes that result thereon, and the setting of the dividend, we think, at the proper level.

Thanks so much.

One moment for our next question. Our next question will come from Peter Abramowitz from Deutsche Bank. Your line is open.

Yes, thanks for the time, and thanks for taking the question. Just wanted to go back, Matt, you had some comments on maintenance costs at Summit in the quarter. Just want to confirm, Are those sort of one-time just related to Ascent? And is there any change in sort of the 26 outlook you gave in December for Summit?

No change in the 26 outlook unique to the fourth quarter.

Okay. Got it. And then I guess either for Harry or for Mark, you talked about some of the deployment you're starting to look at out of the debt fund. Could you just give us a sense of sort of where you're underwriting returns on some of those initial investments?

Yeah, sure. I mean, we've given out a slide at the investor conference that fund targets gross returns of mid-teens.

Okay, and so largely what you've seen so far is fairly consistent with what you talked about at the investor day?

Yeah, absolutely. I mean, no change in the past few weeks, mostly focused on subordinate credit for all the reasons I gave in my introduction, and we're still seeing opportunities there to get the capital out and very interesting opportunities.

All right. That's all for me.

Thank you. One moment for our next question. Our next question will come from the line of Seth Berge from Citi. Your line is open.

Hi, thanks for getting my question. You know, it might be a little early, but just in the context of, you know, one of your peers who owns a site across the street and owns a pre-leasing, I guess could you talk a little bit about kind of any early indications of demand for the 346 Madison development site?

Well, advanced demand for 346. Well, we just debuted it last week. I hope everyone liked the design and the, you know, we closed, I think, in September or October. Somebody can correct me. You know, within those few months, we conducted a fulsome design competition, went through a range of different designs to get to something that, you know, we settled on as being something that we think is really going to be, you know, world class to, you know, to try and stay within the spirit of doing, you know, efficient buildings, but really attractive buildings and well-amend tides, et cetera. We're excited for this project. We think it's the right project at the right time. I think we just formally unveiled it last week, and I know, Steve, your phone's been ringing, and you've had some pre-conversation, so, you know, where are we at?

Yeah, listen, my only wish is that we had the building built and ready to go today because there would be more than enough demand to fill it. Just to give you a sense of the kind of large tenant demand that's out there, there's 250 tenants that are being tracked in the market right now, covering 26 million square feet of tenant demand. Of that, there are 32 tenants with requirements over 250,000 square feet and another 37 tenants with requirements between 100 and 250,000 square feet. There is a dearth of supply for high quality, particularly large block spaces. If you look at the high end of the markets, you know, the best of the best part of the market there's a three point seven percent availability rates and there are no hundred thousand square foot blocks in the what's considered the best of the best part of the market so consequently you know let's get the building built because we'll fill it like you know pronto great thanks for question one moment for our next question the next question will come from line of Vikram Malhorta from Mizuho.

Ilana Zohan.

Afternoon, thanks for getting the questions. I guess just first, you know, you've talked a lot about the leasing pipeline trajectory, getting to that occupancy number. You know, one of your peers yesterday said New York on new leasing, you know, you're doing double-digit roll-ups. We can see that in your reported numbers. You're seeing roll-ups. I'm just trying to understand as it stands today with the pipeline, Like, where would you peg your, you know, portfolio mark-to-market today?

Well, yeah, we gave guidance or our objective for the year back at the investor conference. We don't mark-to-market the portfolio, you know, in its entirety because you can't mark-to-market this, you know, in one shot. But I would say our pipeline reflects the exact range that we gave in December.

What was the range in seven, do you recall?

It'll be high single digits.

Okay. Just – I know, you know, I'm not going into, like, what is FAD? Does it cover your dividend or not? Does it matter? But just one component, given the leasing you've done last year that's, you know, commencing and then the tenant's spending money and all the leasing you're doing this year, how should we just think about actual dollars in terms of TI that are hitting that FAD calculation this year versus last year?

Thank you for leading in by saying you're not going to compare the Fed to the dividend I appreciate that as it relates to trajectory you know we are still funding as we did in 25 you know leasing that we've done for the last couple of years that though as volumes you know slow as we get the portfolio full once you get to you know we're gonna get to close to 95% by the end of the year so you know volumes will will you know drift lower and then we you know Steve to seeing concessions kind of moderate, then that spend goes down. It's kind of the natural progression, and that follows with the NOI growth that we're seeing next year and thereafter.

It's worth noting that over the next four years, we have the lowest rollover that I recall in the company's history, less than 900,000, typically 900,000 square feet of leases expiring each year over the next four years, whereas typically we were a million two to a million five or more in certain years I think another way to look at is I think over the past two years we did six million square feet at least eight million in three years eight million three six million two years I think our projection for the years like a million six or a million half in that range one point five one point six million we don't have rejection for next year but we that we've been public with we certainly have our own internal projections and suffice it to say as we continue to fill these buildings and get towards occupancy the volume of leasing necessary to generate high occupancy becomes somewhat less capital associated with that becomes less and the scarcity value allows you to trim in renewal TIs and free rent back to you know levels that are so there's multiple reasons why we would see a big improvement in in that fad number in 27 which is what I was trying to allude to two or three questions ago on Fed, and, you know, this is just, you know, the reality of six million feet of leasing in two years. You have to pay the capital to, but now we've got a million and a half square feet that we're going to lease this year, unless we over exceed that. And the projection for the year after, and the year after, as Steve just said, are going to be relatively modest. because of the less roll and the tightening of the packages. So, you know, that's where it is, but it's a good news problem, guys. It's a good news reality that, you know, we're paying to install a lot of 10, 15, in some cases 20-year tenancy, often at triple-digit rents. What was our average rent for the quarter, Matt?

Low 90s.

Low 90s. You know, we're in the 90s to 100s, you know, now for average rents in this portfolio. And you can, you know, that's where you start to make some real margin to cover the concessions and, you know, contribute to the cash flow of the company. But it took a lot of work over the past few years to get here. And now we're here and we're kind of enjoying that. So I think we're six or 12 months ahead of, I think, the, you know, the narrative here, you know, looking after 27 and beyond. And, you know, we see a lot of, you know, a lot of great, you know, recovery there in both fad and earnings, which, you know, will be the subject of, you know, discussions in the second half of this year.

No, I just I appreciate that. I guess, you know, we're just trying to understand you through the 10% same store number for next year, which is a great acceleration. But just trying to understand whether it's like delayed TI spend or debt refi or asset sale impacts, which will, you know, may or may not be diluted. But just as we go, that how much of that 10% then gets offset so that maybe the fad growth gets pushed out again one year. That's kind of, I guess, I'm just trying to make one big piece of it that's been a headwind the last three years. and you're saying it's going to be a tailwind, but ultimately, I guess we're just trying to understand how much of that 10% next year gets eaten up.

I think Mark gave you all the commentary you need. We have 10% NOI growth coming out of it, and capital should be moderating. That's it. That's the end game.

Thank you. One moment for our next question. Our next question will come from the line of Michael Lewis from Truist Securities. Your line is open.

I apologize if I'm just blanking on this. But why is Landmark Square now 733,000 square feet versus 863,000 square feet the quarter before? Did 130,000 come out of service for something?

Yeah, that's a campus made up of multiple buildings. One of the buildings is under development, so it got popped out of the operating property square footage, and it's over in the development square footage. Nice catch.

Well done. That would have been my first catch. Did I pass?

Yeah, we have some exciting things we're working on, on one of the buildings.

Yeah, we got approval last year to convert three landmark square to residential. We just received the approval from the town and now working on capitalizing that deal.

Okay, thank you. And then my second question, you know, there were questions about rent and mark to market and cash rent spreads. And, you know, this is one of the things with office I think that gets confusing. I just tried to do a quick back of the envelope. I looked at the last five quarters that you're leasing for rent, term, free rent, TIs, and then I did the same thing for the trailing five quarters in 2019. And it's not clear to me, right, like, so TIs and free rent periods are up like 60%, 70% since then. Rent's only up like 20%, 25%. It's not clear to me that the total lease economics are better. I just wonder, you know, how do you think about that, you know, first of all, as a signal of strength in the market or what's happening in the market, and also in negotiating, right, because these concessions could get sticky, people get used to them. I don't know, any thoughts on that about the change in, like, the total review value instead of cash rent?

You've got to amortize the TI over the term of the lease to get to, I mean, yes, it's a nominal one-time number, the upfront TI, but on a, you know, 15-year lease, just make sure you know I'm not I'm not questioning your math I'm just saying make sure that when you're comparing a 20% annual rent increase make sure you're looking at the annual TI increase it's not 60% you know annually it's you know you guys spread over the terminal lease I mean that's the only thing I would say to that but to the more fundamental question more leasing being done in new deals, right, new tenants coming in as opposed to renewals. I think you look at, you know, the where it all comes home to roost is in price per square foot for premium assets. So, you know, when you put everything through the rents and TI and the free rent and, you know, downtime, you know, asset values today for, I'll call it, you know, the top, you know, 20% of the market, 25% of the market, you know, is, I think, solidly between one to $2,000 a square foot, you know, below $1,500 a foot for older but well-located renovated product and probably, you know, $1,800 to $2,500 a foot, maybe even $3,000 a foot for, you know, for the best new product. And so in order to achieve those kind of price per foot, they have to be supported with, you know, the net effective increase of rents minus concessions. And certainly, if you look back to 18 or whatever period of time you were looking at, you know, asset values were not there. So, you know, look, there is a part of the market that's still recovering. And I think the story is yet to be told on, you know, assets where the average rents are below $100 a foot. And yet, you're right, the TI and free rent is relatively high relative to those leases. But for buildings that are enjoying average rents well north of 100 a foot, I think the improvement is both nominal and net effective. And so, I wouldn't paint the whole market with one brush. There's different categories of buildings that we're referring to. And what we're referring to mostly is that upper echelon of building in East Midtown.

Yeah, thanks. You know, the economic occupancy addition I thought was great and really helpful. It made me kind of, you know, dream of a metric where maybe we could put the whole value of the lease together. You got a dream.

Matt's pulling himself up off the floor. Gotta have dreams, Mike. He's pulling himself up off the floor.

Dare to dream. Thank you, guys.

Thank you. One moment for our next question. And our next question on the comfort line of Caitlin Burrows from Goldman Sachs. Your line is open.

Hopefully two short ones. Just first on the income statement, it showed that 4Q other income was almost $40 million, which was up meaningfully year over year. Just wondering what led to that other increase in 4Q and what was included in there.

You know, the fee income, which flows through other income, is lumpy, as we said. You know, that causes some quarters to, you know, look high, and other quarters, that's when we see the, oh, well, we missed. It's often a function of when transactions close. So we had a couple of transactions, like 100 Park and 800 Third, and those things close in the fourth quarter, as well as some, you know, other special servicing fees that came through in the fourth quarter that drove that number higher just for the quarter.

Got it. Okay, and then back to those summit one-time expenses, sorry to bring them up again. I was just wondering, were they shown in the summit operator expenses line or SL Green's operating expenses? Because it looked like operating expenses were up again in 4Q, but I know last quarter we talked about AC costs being highest in 3Q. So, yeah, wondering where those showed up, and if it wasn't in the operating expenses, then what drove that?

So the summit expenses were in summit operator. Operating expenses, along with other consolidated lines, went up in large part because 803rd became a consolidated asset during the quarter when we bought out our partners.

Got it. Thank you.

Thank you.

Operator, is that it?

Yes. This concludes our question and answer session. I would like to turn it back over to Mark Holliday for closing remarks.

No closing remarks, Operator. I think, you know, we've been on for quite some time. So thank you to all who stayed with us throughout. Thank you for the questions, and we'll speak to you all again in three months.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.