-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PnEJQJDxdAxPV30flA1kkTC7QIUdeugi3VcZloTgwg+w6o6T8ayVOO2DuBSCcNUp hkdw/WMJ/Pa5N1pQq/hGIQ== /in/edgar/work/0000912057-00-045783/0000912057-00-045783.txt : 20001026 0000912057-00-045783.hdr.sgml : 20001026 ACCESSION NUMBER: 0000912057-00-045783 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001025 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SL GREEN REALTY CORP CENTRAL INDEX KEY: 0001040971 STANDARD INDUSTRIAL CLASSIFICATION: [6512 ] IRS NUMBER: 133956775 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13199 FILM NUMBER: 745171 BUSINESS ADDRESS: STREET 1: 420 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10170 BUSINESS PHONE: 2125942700 MAIL ADDRESS: STREET 1: 420 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10170 8-K 1 a2028535z8-k.txt FORM 8K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT ------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: October 25, 2000 SL GREEN REALTY CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Maryland (STATE OF INCORPORATION) 1-13199 13-3956775 (COMMISSION FILE NUMBER) (IRS EMPLOYER ID. NUMBER) 420 Lexington Avenue New York, New York 10170 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (212) 594-2700 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS 99.1 Third Quarter Supplemental Data 99.2 Press Release ITEM 9. REGULATION FD DISCLOSURE Following the issuance of a press release on October 25, 2000 announcing the Company's results for the third quarter ended September 30, 2000, the Company intends to make available supplemental information regarding the Company's operations that is too voluminous for a press release. The Company is attaching the supplemental data as Exhibit 99.1 and the press release as Exhibit 99.2 to this Current Report on Form 8-K. Note: the information in this report (including the exhibits) is furnished pursuant to Item 9 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SL GREEN REALTY CORP. /s/ Thomas E. Wirth ---------------------------------------- Thomas E. Wirth Executive Vice President, Chief Financial Officer Date: October 24, 2000 3 EX-99.1 2 a2028535zex-99_1.txt EXHIBIT 99.1 [LETTERHEAD OF SL GREEN REALTY CORP.] THIRD QUARTER SUPPLEMENTAL DATA SEPTEMBER 30, 2000 SL Green Realty Corp. is a fully integrated, self-administered and self-managed Real Estate Investment Trust (REIT) that primarily owns, manages, leases, acquires and repositions Class B office properties in emerging, high-growth submarkets of Manhattan. - -- SL Green's common stock and Preferred Income Equity Redeemable Shares ("PIERS" SM), are listed on the New York Stock Exchange, and trade under the symbols: SLG and SLG PrA respectively. - -- SL Green maintains an internet site at WWW.SLGREEN.COM at which most key investor relations data pertaining to dividend declaration, payout, current and historic share price, etc. can be found. Such information is not reiterated in this supplemental financial package. This supplemental financial package is available through the Company's Internet site until the Company's quarterly report on Form 10-Q is filed with the Securities and Exchange Commission. - -- This data is presented to supplement audited and unaudited regulatory filings of the Company and should be read in conjunction with those filings. The financial data herein is unaudited and is provided from the prospective of timeliness to assist readers of quarterly and annual financial filings. As such, data otherwise contained in future regulatory filings covering the same period may be restated from the data presented herein. - -- Questions pertaining to the information contained herein should be referred to David J. Nettina or Thomas E. Wirth at dave.nettina@slgreen.com or tom.wirth@slgreen.com or at 212-594-2700. This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this report that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), expansion and other development trends of the real estate industry, business strategies, expansion and growth of the Company's operations and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, general economic and business conditions, the business opportunities that may be presented to and pursued by the Company, changes in laws or regulations and other factors, many of which are beyond the control of the Company. Any such statements are not guarantees of future performance and actual results or developments may differ materially from those anticipated in the forward-looking statements. The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statements for the quarterly period ended September 30, 2000 that will subsequently be released on Form 10-Q to be filed on or before November 15, 2000 and the 1999 audited financial statements included in the Company's annual report on Form 10-K. 2
CONTENTS PAGE Highlights of Current Period Financial Performance 4-8 Unaudited Financial Statements Balance Sheet 9 Statement of Operations 11 Joint Venture Statements 13 Statement of Stockholders' Equity 15 Funds From Operations 16 Selected Financial Data 17-19 Summary of Debt and Ground Lease Arrangements 20-21 Property Data Composition of Property Portfolio 22 Top Tenants 23 Leasing Activity Summary 24-26 Lease Expiration Schedules 27-28 Summary of Acquisition Activity 29
3 SL GREEN REALTY CORP. THIRD QUARTER 2000 UNAUDITED ================================================================================ FINANCIAL HIGHLIGHTS EARNINGS PERFORMANCE o Third quarter Funds From Operations (FFO) were $20.1 million or $0.70 per share (diluted), 21% better than one year ago, when FFO was $15.9 million or $0.58 per share (diluted). Quarterly FFO results exclude the net gain on the company's redemption of its preferred interest in 1370 Avenue of the Americas ($5.6 million). The 21% growth in FFO reflects contributions from the following: o GAAP NOI from wholly-owned properties increased $2.9 million: -- $1.0 million increase from wholly-owned properties acquired in 1999. -- $2.8 million increase from same store properties as GAAP revenue increased $5.0 million, (i) $0.9 million due to an increase in the weighted average occupancy rate from 95% in 1999 to 98% in 2000, primarily related to occupancy improvements at 17 Battery, 1412 Broadway and 420 Lexington Avenue and 711 Third Avenue; (ii) $2.0 million due to GAAP replacement rents which were 42% higher than the previously fully escalated rents, and (iii) increased escalation and reimbursement income ($1.5 million) related to the increased recovery ($1.1 million) of higher electric expense resulting from the higher electric rates, higher real estate tax escalations, and increased passthroughs ($0.3 million). The increased electric recovery also includes a charge to recover higher second quarter electric costs from electric inclusion tenants. The increased electric recovery represented a 75% recovery rate on the increased costs. Revenue gains were partially offset by $2.0 million of higher operating costs which resulted from: higher utility costs ($1.2 million) primarily due to higher electric rates ($1.1 million) and higher fuel costs ($0.1 million); higher payroll and cleaning costs ($0.6 million). Real estate tax expense also increased $0.2 million as assessed property values increased. -- $1.1 million increase from the Company's joint ventures. -- $2.0 million decrease from wholly-owned properties sold or contributed to a joint venture. 4 o The Company had higher interest costs ($2.9 million) associated with: higher average debt levels due to acquisition and new investment debt ($1.6 million), higher average debt levels due to the funding of ongoing capital projects and working capital requirements ($0.5 million), and higher interest rates from floating rate debt ($0.8 million). o MG&A decreased $0.4 million reflecting (i) increased amount of costs being allocated to the Company's joint ventures and service corporations (ii) reduction in expense due to an insurance refund, and (iii) reduced contractual employee costs. o Non-real estate depreciation increased $0.2 million due to additional amortization of financing costs associated with the company's new line of credit ($0.1 million) and increased corporate fixed asset depreciation ($0.1 million). OPERATING MARGINS QUARTERLY o Cash NOI in the 2000 "same store" portfolio rose 14% from $20.6 million to $23.5 million, and operating margins improved from 48.5% to 49.6%. GAAP NOI increased by $2.8 million, approximately 12% over a year ago. However, GAAP operating margins after ground rent remained unchanged at 54.5% as operating expenses increased at a greater rate than revenue. Note: The properties comprising the 2000 same store portfolio are listed on page 8. One of the primary drivers increasing same store cash NOI is the $4.5 million (11%) increase in total revenue combined with a $0.3 million reduction in free rent, resulting in a $4.8 million (12%) increase in cash revenue. The decrease in free rent is primarily due to 17 Battery. The $4.5 million increase in total revenue is due to: 1. $1.0 million resulting from an increase of overall same store occupancy from 95% to 98% with the largest occupancy increases at 420 Lexington Avenue ($0.4 million); 17 Battery Place ($0.2 million), 711 Third Ave ($0.2 million) and 1412 Broadway ($0.3 million). 2. An increase in rent ($1.7 million) resulting from higher replacement rents which were 30% greater than previously fully escalated rents primarily at 420 Lexington Avenue ($1.2 million), 440 Ninth Avenue ($0.4 million) and 1372 Broadway ($0.2 million); 5 3. The balance of the increase is due to higher escalation and reimbursement income ($1.5 million), consisting of electric reimbursement ($1.1 million), real estate tax escalations ($0.1 million) and increased passthrough of operating costs ($0.2 million). 4. Rent steps from current in-place tenants ($0.5 million). Partially offsetting the total revenue increase were increased operating expenses ($2.0 million) primarily due to higher utility costs ($1.2 million), and higher payroll and cleaning costs ($0.6 million). The increased payroll and cleaning costs relate to increased overtime payroll ($0.2 million) charged back to tenants, lower prior year costs related to benefit refunds ($0.2 million), and 5% higher labor costs ($0.2 million). Real estate taxes also increased ($0.2 million) due to higher assessed property values. o The Company's consolidated third quarter EBITDA margins before ground rent improved to 65.4% compared to 57.7% for 1999. The EBITDA margin after ground rent was 59.7% as compared to 51.6% in the same period of the prior year. These margin improvements are attributable to (i) GAAP NOI growth resulting from leasing 222,000 previously vacant square feet, which increased portfolio occupancy to 98%, and (ii) an average improvement in replacement rents over this 12-month period of 30% versus previously fully escalated rents, (iii) income from unconsolidated joint ventures, and (iv) income from structured finance. QUARTERLY LEASING HIGHLIGHTS o Vacancy at June 30, 2000 was 211,633 useable square feet. During the quarter, 220,630 additional useable office square feet became available at an average escalated cash rent of $26.75 per rentable square foot. Space available to lease during the quarter totaled 432,263 useable square feet, or 4.7% of the total portfolio. o During the third quarter, 43 leases were signed totaling 185,262 useable office square feet with new cash rents averaging $37.81 per rentable square foot. Replacement rents were 46% greater than rents on previously occupied space, which had a fully escalated cash rent averaging $25.93 per rentable square foot. Average tenant concessions were one month of free rent and an allowance of $3.86 per rentable square foot. Including early renewals and excluding holdover tenants, the tenant renewal rate was 30%. 16 leases have expired comprising 12,849 useable square feet that are in a holdover status. This results in 234,152 useable square feet remaining vacant at September 30, 2000. o The Company signed 2 leases totaling 7,564 useable square feet that were for the early renewal of tenants. These early renewals were for space that was not scheduled to become available until after the third quarter of 2000. The Company was able to renew the current tenants at an average cash rent of $27.91 representing an increase of 37% over the previously escalated rents of $20.39. 6 INVESTMENT ACTIVITY o On September 21, 2000, the Company entered into an agreement to purchase 1370 Broadway for $50.4 million. This 16-story, 255,000 square foot office building is located in the heart of Times Square, directly across the street from 1372 Broadway, another SL Green building. In-place rents are approximately $27.72, approximately 38% below current market levels. The acquisition will be funded through the Company's unsecured line of credit. This transaction is scheduled to close in January 2001. o On September 22, 2000, the Company, via a joint venture with Morgan Stanley Real Estate Fund III ("MSREF"), entered into an agreement to purchase 180 Madison Avenue for $41.25 million. The property consists of 265,000 square feet over 23 floors. It is located at the corner of 34th Street and Madison Avenue. SL Green will purchase a 49.9% interest in the property. The Company intends to use the acquisition to effect a Section 1031 tax-free exchange in order to partially defer the capital gain resulting from the sale of 90 Broad Street. SL Green will assume managing and leasing responsibilities for the property. This transaction is scheduled to close in December 2000. o On September 28, 2000, the Company entered into an agreement to purchase various ownership and mortgage interests in One Park Avenue for $233.9 million. This 913,000 square foot, 20-story office building is located between 32nd and 33rd Streets with full block prominence on Park Avenue. The Company also acquired an option to purchase the ground lease position. The acquisition will be financed with a mortgage loan from Lehman Brothers Holdings, Inc. and the Company's unsecured line of credit. This transaction is scheduled to close in January 2001. o On September 15, 2000 the Company announced a gain of $8.7 million for cash received in connection with the early redemption of its $20 million preferred equity interest in 1370 Avenue of the Americas. The Company recorded a $2.8 million adjustment to reduce this gain as the Company has recorded an award for certain members of management in connection with the realization of this investment gain. o The Company announced that it has entered into contracts for the sale of two downtown properties: o The first is located at 90 Broad Street. This property was jointly owned with MSREF and was sold for $60 million. The property is approximately 339,000 square feet with a contracted sales price of $60 million, or $177 per square foot. The sale is scheduled to close in November 2000. o The second is a wholly-owned property located at 17 Battery Place South. This property is approximately 400,000 square feet with a contract price of $53 million, or $132 per square foot. The sale is expected to occur in December 2000. 7 o See Property Acquisition Schedule on page 29. CAPITALIZATION AND LIQUIDITY o On October 2, 2000, the Company repaid its $65 million mortgage secured by 420 Lexington Avenue and obtained a new mortgage in the amount of $125 million. The $125 million mortgage has a term of 10 years and bears interest at a fixed rate of 8.54 %. o The Company's dividend payout ratio was 51.9% of FFO and 76.5% of FAD before first cycle leasing costs. o Dividends during the quarter were declared on September 14, 2000 for distribution of $0.3625 per common share and $0.50 per share of Preferred Income Equity Redeemable Stock payable on October 15, 2000 for shareholders of record as of September 29, 2000. OTHER o Starting January 1, the Company changed its definition of "Same Store" results to include all properties as of 1/1/00 which were owned 12 months or more. Subsequently, the same store group has been adjusted to remove properties sold during the first and second quarters and will include the following properties: 2000 SAME STORE 673 First Avenue 1140 Avenue of the Americas 420 Lexington Avenue 470 Park Avenue South 50 West 23rd Street 1466 Broadway 70 West 36th Street 17 Battery Place 440 Ninth Avenue 1414 Avenue of the Americas 633 Third Avenue 711 Third Avenue 1372 Broadway 110 East 42nd Street 1412 Broadway
8 COMPARATIVE BALANCE SHEET UNAUDITED ($000's omitted)
Standard GAAP Format 9/30/2000 9/30/1999 +/- % CHANGE --------- --------- --- -------- ASSETS Commercial real estate properties, at cost: Land & land interests 125,572 132,883 (7,311) -6% Buildings & improvements fee interest 609,089 623,147 (14,058) -2% Buildings & improvements leasehold 137,441 126,974 10,467 8% Buildings & improvements under capital lease 12,208 12,208 -- 0% --------- --------- ------- 884,310 895,212 (10,902) -1% Less accumulated depreciation (72,179) (53,335) (18,844) 35% --------- --------- ------- 812,131 841,877 (29,746) -4% Other Real Estate Investments: Investment in unconsolidated joint ventures 59,632 22,534 37,098 165% Mortgage loans and preferred equity investments 49,903 40,901 9,002 22% Properties held for sale 49,890 -- 49,890 -- Cash and cash equivalents 14,064 8,409 5,655 67% Restricted cash: Tenant security 18,979 16,620 2,359 14% Escrows & other 15,604 11,311 4,293 38% Tenant and other receivables, net of $1,930 reserve at 9/30/00 9,132 8,944 188 2% Related party receivables 964 192 772 402% Deferred rents receivable, net of reserve for tenant credit loss of $5,002 at 9/30/00 43,452 33,821 9,631 28% Investment in and advances to affiliates 7,943 4,908 3,035 62% Deferred costs, net 37,924 26,978 10,946 41% Other assets 34,100 13,745 20,355 148% --------- --------- ------- TOTAL ASSETS 1,153,718 1,030,240 123,478 12% ========= ========= ======= 6/30/2000 +/- % CHANGE --------- --- -------- ASSETS Commercial real estate properties, at cost: Land & land interests 131,991 (6,419) -5% Buildings & improvements fee interest 646,150 (37,061) -6% Buildings & improvements leasehold 135,886 1,555 1% Buildings & improvements under capital lease 12,208 -- 0% ---------- ------- 926,235 (41,925) -5% Less accumulated depreciation (68,653) (3,526) 5% ---------- ------- 857,582 (45,451) -5% Other Real Estate Investments: Investment in unconsolidated joint ventures 63,850 (4,218) -7% Mortgage loans and preferred equity investments 76,962 (27,059) -35% Properties held for sale 49,890 -- 49,890 Cash and cash equivalents 15,317 (1,253) -8% Restricted cash: Tenant security 18,081 898 5% Escrows & other 13,045 2,559 20% Tenant and other receivables, net of $1,930 reserve at 9/30/00 6,851 2,281 33% Related party receivables 781 183 23% Deferred rents receivable, net of reserve for tenant credit loss of $5,002 at 9/30/00 42,867 585 1% Investment in and advances to affiliates 7,527 416 6% Deferred costs, net 37,922 2 0% Other assets 20,057 14,043 70% ---------- ------- ------- TOTAL ASSETS 1,160,842 (7,124) -1% ========== ======= ======= 3/31/1900 +/- % CHANGE --------- --- -------- ASSETS Commercial real estate properties, at cost: Land & land interests 132,081 (6,509) -5% Buildings & improvements fee interest 637,168 (28,079) -4% Buildings & improvements leasehold 134,304 3,137 2% Buildings & improvements under capital lease 12,208 -- 0% ---------- ------- 915,761 (31,451) -3% Less accumulated depreciation (62,965) (9,214) 15% ---------- ------- 852,796 (40,665) -5% Other Real Estate Investments: Investment in unconsolidated joint ventures 62,021 (2,389) -4% Mortgage loans and preferred equity investments 65,680 (15,777) -24% Cash and cash equivalents 10,147 3,917 39% Restricted cash: Tenant security 17,555 1,424 8% Escrows & other 21,158 (5,554) -26% Tenant and other receivables, net of $1,930 reserve at 9/30/00 5,079 4,053 80% Related party receivables 446 518 116% Deferred rents receivable, net of reserve for tenant credit loss of $5,002 at 9/30/00 40,252 3,200 8% Investment in and advances to affiliates 5,695 2,248 39% Deferred costs, net 31,542 6,382 20% Other assets 11,563 22,537 195% ---------- ------- TOTAL ASSETS 1,123,934 29,784 3% ========== =======
Page 9 COMPARATIVE BALANCE SHEET UNAUDITED ($000's omitted)
Standard GAAP Format 9/30/2000 9/30/1999 +/- % CHANGE --------- --------- --- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable 345,351 337,190 8,161 2% Revolving credit facilities 126,752 61,000 65,752 108% Accrued interest payable 3,069 2,341 728 31% Accounts payable and accrued expenses 28,045 11,399 16,646 146% Deferred revenue 1,444 695 749 108% Capitalized lease obligations 15,242 14,946 296 2% Deferred land lease payable 12,805 11,170 1,635 15% Dividend and distributions payable 12,065 11,672 393 3% Security deposits 18,951 18,481 470 3% --------- --------- ------- TOTAL LIABILITIES 563,724 468,894 94,830 20% Minority interest (2,308 units outstanding) 41,753 45,558 (3,805) -8% 8% Preferred Income Equity Redeemable Shares $0.01 par value, $25.00 mandatory liquidation preference, 4,600 outstanding 110,667 110,248 419 0% STOCKHOLDERS' EQUITY Common stock, $.01 par value 100,000 shares authorized, 24,516 issued and outstanding at 9/30/00 245 242 3 1% Additional paid - in capital 428,635 422,377 6,258 1% Deferred compensation plans (5,939) (7,410) 1,471 -20% Retained earnings / (distributions in excess of earnings) 14,633 (9,669) 24,302 -251% --------- --------- ------- TOTAL STOCKHOLDERS' EQUITY 437,574 405,540 32,034 8% --------- --------- ------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,153,718 1,030,240 123,478 12% ========= ========= ======= 6/30/2000 +/- % CHANGE --------- --- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable 346,294 (943) 0% Revolving credit facilities 145,752 (19,000) -13% Accrued interest payable 1,823 1,246 68% Accounts payable and accrued expenses 26,851 1,194 4% Deferred revenue 1,838 (394) -21% Capitalized lease obligations 15,165 77 1% Deferred land lease payable 12,493 312 2% Dividend and distributions payable 12,010 55 0% Security deposits 18,104 847 5% --------- ------ TOTAL LIABILITIES 580,330 (16,606) -3% Minority interest (2,308 units outstanding) 42,544 (791) -2% 8% Preferred Income Equity Redeemable Shares $0.01 par value, $25.00 mandatory liquidation preference, 4,600 outstanding 110,561 106 0% STOCKHOLDERS' EQUITY Common stock, $.01 par value 100,000 shares authorized, 24,516 issued and outstanding at 9/30/00 244 1 1% Additional paid - in capital 425,837 2,798 1% Deferred compensation plans (6,239) 300 -5% Retained earnings / (distributions in excess of earnings) 7,565 7,068 93% --------- ------ TOTAL STOCKHOLDERS' EQUITY 427,407 10,167 2% --------- ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,160,842 (7,124) -1% ========= ====== 3/31/1900 +/- % CHANGE --------- --- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable 332,262 13,089 4% Revolving credit facilities 141,752 (15,000) -11% Accrued interest payable 3,158 (89) -3% Accounts payable and accrued expenses 15,753 12,292 78% Deferred revenue 1,480 (36) -2% Capitalized lease obligations 15,090 152 1% Deferred land lease payable 12,052 753 6% Dividend and distributions payable 11,962 103 1% Security deposits 17,510 1,441 8% --------- ------ TOTAL LIABILITIES 551,019 12,705 2% Minority interest (2,308 units outstanding) 42,430 (677) -2% 8% Preferred Income Equity Redeemable Shares $0.01 par value, $25.00 mandatory liquidation preference, 4,600 outstanding 110,454 213 0% STOCKHOLDERS' EQUITY Common stock, $.01 par value 100,000 shares authorized, 24,516 issued and outstanding at 9/30/00 242 3 1% Additional paid - in capital 423,032 5,603 1% Deferred compensation plans (6,661) 722 -11% Retained earnings / (distributions in excess of earnings) 3,418 11,215 328% --------- ------ TOTAL STOCKHOLDERS' EQUITY 420,031 17,543 4% --------- ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,123,934 29,784 3% ========= ======
Page 10 COMPARATIVE STATEMENTS OF OPERATIONS UNAUDITED
($000's omitted) Three Months Ended September 2000 1999 +/- % ---- ---- --- - REVENUES Rental revenue, net 44,482 42,158 2,324 6% Free rent 1,978 2,276 (298) -13% Amortization of free rent (851) (625) (226) 36% ------ ------ ----- Net free rent 1,127 1,651 (524) -32% Straight-line rent 2,237 2,004 233 12% Allowance for S/L tenant credit loss (199) (733) 534 -73% Escalation and reimbursement revenues 7,593 6,856 737 11% Signage rent 496 559 (63) -11% Investment income 4,968 1,469 3,499 238% Other income 170 688 (518) -75% ------ ------ ----- TOTAL REVENUES, NET 60,874 54,652 6,222 11% Equity in income from service corporation and subsidiaries 71 223 (152) -68% Equity in income from unconsolidated joint ventures 586 151 435 289% EXPENSES Operating expenses 15,260 14,293 967 7% Ground rent 3,164 3,183 (19) -1% Real estate taxes 7,299 7,481 (182) -2% Marketing, general and administrative 2,540 2,979 (439) -15% ------ ------ ----- TOTAL OPERATING EXPENSES 28,263 27,936 327 1% EBITDA 33,268 27,090 6,178 23% Interest 10,698 7,772 2,926 38% Depreciation and amortization 8,300 7,677 623 8% ------ ------ ----- INCOME BEFORE MINORITY INTEREST 14,270 11,641 2,629 23% Extraordinary loss- early debt extinguishment -- -- -- (430) Gain on sale of properties -- -- -- 4,797 Gain on redemption of preferred equity inv 5,624 -- 5,624 -- Minority interest - BMW -- (354) 354 -100% Minority interest - OP (1,496) (815) (681) 84% ------ ------ ----- NET INCOME 18,398 10,472 7,926 76% Dividends on preferred shares (2,300) (2,300) -- 0% Preferred stock accretion (107) (99) (8) 7% ------ ------ ----- INCOME AVAILABLE FOR COMMON SHARES 15,991 8,073 7,918 98% ====== ====== ===== MG&A to Real Estate Revenue, net 4.56% 5.67% MG&A to Total Revenue, net 4.17% 5.45% Operating Expense to Real Estate Revenue, net 27.38% 27.23% EBITDA to Real Estate Revenue, net 59.69% 51.60% EBITDA before Ground Rent to Real Estate Revenue, net 65.36% 57.67% Three Months Nine Months Ended June 30 Ended Sept 30 2000 2000 ---- ---- REVENUES Rental revenue, net 42,740 130,892 Free rent 2,394 6,362 Amortization of free rent (840) (2,487) ------ ------- Net free rent 1,554 3,875 Straight-line rent 2,356 6,903 Allowance for S/L tenant credit loss (240) (672) Escalation and reimbursement revenues 5,367 18,941 Signage rent 597 1,593 Investment income 3,923 9,903 Other income 197 693 ------ ------- TOTAL REVENUES, NET 56,494 172,128 Equity in income from service corporation and subsidiaries 369 609 Equity in income from unconsolidated joint ventures 782 2,209 EXPENSES Operating expenses 13,443 41,893 Ground rent 3,159 9,505 Real estate taxes 7,053 21,688 Marketing, general and administrative 3,190 8,517 ------ ------- TOTAL OPERATING EXPENSES 26,845 81,603 EBITDA 30,800 93,343 Interest 10,053 30,243 Depreciation and amortization 8,403 24,519 ------- -------- INCOME BEFORE MINORITY INTEREST 12,344 38,581 Extraordinary loss- early debt extinguishment (430) (430) Gain on sale of properties 4,797 19,022 Gain on redemption of preferred equity inv -- 5,624 Minority interest - BMW -- -- Minority interest - OP (1,316) (4,964) ------ ------- NET INCOME 15,395 57,833 Dividends on preferred shares (2,300) (6,900) Preferred stock accretion (107) (320) ------ ------- INCOME AVAILABLE FOR COMMON SHARES 12,988 50,613 ====== ======= MG&A to Real Estate Revenue, net 6.09% 5.27% MG&A to Total Revenue, net 5.65% 4.95% Operating Expense to Real Estate Revenue, net 25.67% 25.93% EBITDA to Real Estate Revenue, net 58.81% 57.79% EBITDA before Ground Rent to Real Estate Revenue, net 64.84% 63.67%
Page 11
($000's omitted - except per share data) Three Months Ended September 30 Ended June 30 Ended Sept 30 2000 1999 2000 2000 ---- ---- ---- ---- PER SHARE DATA: Income available for common shares 15,991 8,073 12,988 50,613 Net income per share (basic) 0.65 0.33 0.53 2.08 Dividend per share 0.3625 0.35 0.3625 1.088 Estimated payout of taxable income 78% 160% 126% 103% Basic weighted average common shares 24,458 24,200 24,309 24,329 Diluted weighted average common shares and common share equivalents outstanding 27,300 26,706 27,045 27,063
PAYOUT OF TAXABLE INCOME ANALYSIS: Estimated taxable income is derived from net income less straightline rent, free rent net of amortization of free rent, plus tax gain on sale of properties, credit loss, straightline ground rent and the difference in depreciable basis between tax and GAAP. The Company has deferred the taxable gain on the sale 29 West 35th Street through a 1031 exchange. Page 12 JOINT VENTURE STATEMENTS Balance Sheet UNAUDITED ---------
($000's omitted) September 30, 2000 -------------------------------------- Total Property SLG Property Interest -------------- --------------------- Land & land interests 69,468 32,774 Buildings & improvements 288,625 135,781 ------- ------- 358,093 168,555 Less accumulated depreciation (5,948) (2,786) ------- ------- Net Real Estate 352,145 165,769 Cash and cash equivalents 5,857 2,969 Restricted cash 9,937 4,632 Tenant receivables, net of $710 reserve 1,611 742 Deferred rents receivable, net of reserve for tenant credit loss of $635 at 9/30/00 3,680 1,669 Deferred costs, net 4,874 2,168 Other assets 2,977 2,028 ------- ------- Total Assets 381,081 179,977 ======= ======= Mortgage Loan Payable 238,650 111,040 references page 20 Accrued interest payable 1,559 745 Accounts payable and accrued expenses 6,382 3,013 Security deposits 5,915 2,726 Contributed Capital 128,575 62,453 references page 9 (1) ------- ------- Total Liabilities and Equity 381,081 179,977 ======= ======= June 30, 2000 -------------------------------------- Total Property SLG Property Interest -------------- --------------------- Land & land interests 69,468 32,774 Buildings & improvements 287,017 135,186 ------- ------- 356,485 167,960 Less accumulated depreciation (4,199) (1,973) ------- ------- Net Real Estate 352,286 165,988 Cash and cash equivalents 7,071 3,287 Restricted cash 8,043 3,706 Tenant receivables, net of $710 reserve 1,342 638 Deferred rents receivable, net of reserve for tenant credit loss of $635 at 9/30/00 2,569 1,192 Deferred costs, net 6,344 2,898 Other assets 2,652 2,442 ------- ------- Total Assets 380,307 180,151 ======= ======= Mortgage Loan Payable 230,650 107,048 Accrued interest payable 1,557 744 Accounts payable and accrued expenses 7,212 3,370 Security deposits 5,087 2,317 Contributed Capital 135,801 66,672 ------- ------- Total Liabilities and Equity 380,307 180,151 ======= =======
As of September 30, 2000 the Company has four joint venture interests representing a 35% economic interest in 90 Broad Street, acquired in July 1999, a 50% interest in 1250 Broadway, acquired in August 1999, a 50% interest in 100 Park Avenue, acquired in February 2000 and a 35% interest in 321 West 44th Street, contributed May 2000. These interests are accounted for on the equity method of accounting and, therefore, are not consolidated into the company's financial statements. (1) The primary difference with Investment in unconsolidated joint ventures represents the unrecognized deferred gain on 321 West 44th Street. Page 13 JOINT VENTURE STATEMENTS Statement of Income & Expense for Unconsolidated Joint Ventures UNAUDITED ---------
($000's omitted) Three Months Ended September 30, 2000 ---------------------------------------------------------- Total Property SLG Property Interest SLG Subsidiary -------------- --------------------- -------------- Rental Revenue, net 13,141 6,202 Free rent 670 270 Amortization of free rent (82) (36) ------ ----- Net free rent 588 234 Straight-line rent 712 324 Allowance for S/L tenant credit loss (189) (82) Escalation and reimbursement revenues 2,171 978 Investment income 190 93 Other income 15 6 ------ ----- TOTAL REVENUES, NET 16,628 7,755 EXPENSES Operating expenses 5,595 2,530 Real estate taxes 2,695 1,297 ------ ----- TOTAL OPERATING EXPENSES 8,290 3,827 GAAP NOI 8,527 4,010 CASH NOI 7,227 3,452 Interest 5,166 2,400 Depreciation and amortization 2,047 942 Extraordinary Loss -- -- ------ ----- NET INCOME 1,125 586 references page 11 Plus: Real Estate Depreciation 1,813 842 Plus: Extraordinary Loss -- -- Plus: Management & Leasing Fees -- -- 65 ------ ----- ----- FUNDS FROM OPERATIONS 2,938 1,428 FAD ADJUSTMENTS: Plus: Non Real Estate Depreciation 233 100 Plus: 2% Allowance for S/L Tenant Credit Loss 189 82 Less: Free and S/L Rent (1,300) (558) Less: Second Cycle Tenant Improvement, -- -- Leasing Commissions & Recurring Capex (595) (255) ------ ----- (1,473) (631) reference page 16 ====== ===== Operating Expense to Real Estate Revenue, net 33.68% 32.69% GAAP NOI to Real Estate Revenue, net 51.33% 51.82% Cash NOI to Real Estate Revenue, net 43.50% 44.62% Three Months Ended June 30, 2000 ---------------------------------------------------------- Total Property SLG Property Interest SLG Subsidiary -------------- --------------------- -------------- Rental Revenue, net 12,542 5,943 Free rent 657 285 Amortization of free rent (65) (29) ------ ----- Net free rent 592 256 Straight-line rent 690 324 Allowance for S/L tenant credit loss (192) (87) Escalation and reimbursement revenues 1,442 639 Investment income 91 44 Other income 2 2 ------ ----- TOTAL REVENUES, NET 15,167 7,121 EXPENSES Operating expenses 3,816 1,760 Real estate taxes 2,653 1,286 ------ ----- TOTAL OPERATING EXPENSES 6,469 3,046 GAAP NOI 8,890 4,161 CASH NOI 7,608 3,582 Interest 4,874 2,287 Depreciation and amortization 2,149 1,006 Extraordinary Loss -- -- ------ ----- NET INCOME 1,675 782 Plus: Real Estate Depreciation 1,943 917 Plus: Extraordinary Loss -- -- Plus: Management & Leasing Fees -- -- 44 ------ ----- ----- FUNDS FROM OPERATIONS 3,618 1,699 FAD ADJUSTMENTS: Plus: Non Real Estate Depreciation 206 88 Plus: 2% Allowance for S/L Tenant Credit Loss 192 87 Less: Free and S/L Rent (1,282) (580) Less: Second Cycle Tenant Improvement, Leasing Commissions & Recurring Capex (255) (89) ------ ----- (1,139) (494) ====== ===== Operating Expense to Real Estate Revenue, net 25.00% 24.57% GAAP NOI to Real Estate Revenue, net 58.24% 58.11% Cash NOI to Real Estate Revenue, net 49.84% 50.01%
As of September 30, 2000 the Company has four joint venture interests representing a 35% economic interest in 90 Broad Street, acquired in July 1999, a 50% interest in 1250 Broadway, acquired in August 1999, a 50% interest in 100 Park Avenue, acquired in February 2000 and a 35% interest in 321 West 44th Street, contributed May 2000. These interests are accounted for on the equity method of accounting and, therefore, are not consolidated into the company's financial statements. Page 14 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Retained Earnings / ($000's omitted) Additional (Distributions) In Common Stock Paid-in Capital Excess of Earnings ------------ --------------- ------------------ Balance at December 31, 1997 123 178,669 (2,584) Net Income 29,451 Preferred dividend and accretion requirement (5,970) Issuance of common stock net of offering cost ($1,615) and revaluation increase in minority interest ($6,934) 115 235,006 Deferred compensation plan 2 3,264 Cash distributions declared ($1.40 per common share) (29,456) Officers' loans, net of amortization -------------------------------------------------------- Balance at December 31, 1998 240 416,939 (8,559) Net Income 42,856 Preferred dividend and accretion requirement (9,598) Deferred compensation plan 2 5,019 Cash distributions declared ($1.41 per common share) (34,121) Amortization of officers' loan and deferred compensation -------------------------------------------------------- Balance at December 31, 1999 242 421,958 (9,422) Net Income 57,833 Preferred dividend and accretion requirement (7,220) Deferred compensation plan 746 Exercise of employee stock options 2 3,803 Cash distributions declared ($1.088 per common share) (26,558) Redemption of operating partnership units 1 2,128 Amortization of officers' loan and deferred compensation -------------------------------------------------------- Balance at September 30, 2000 (unaudited) 245 428,635 14,633 ======================================================== Deferred Compensation Plan / Officers' Loan Total ---- ----- Balance at December 31, 1997 176,208 Net Income 29,451 Preferred dividend and accretion requirement (5,970) Issuance of common stock net of offering cost ($1,615) and revaluation increase in minority interest ($6,934) 235,121 Deferred compensation plan (3,266) -- Cash distributions declared ($1.40 per common share) (29,456) Officers' loans, net of amortization (528) (528) -------------------------------- Balance at December 31, 1998 (3,794) 404,826 Net Income 42,856 Preferred dividend and accretion requirement (9,598) Deferred compensation plan (4,771) 250 Cash distributions declared ($1.41 per common share) (34,121) Amortization of officers' loan and deferred compensation 1,891 1,891 -------------------------------- Balance at December 31, 1999 (6,674) 406,104 Net Income 57,833 Preferred dividend and accretion requirement (7,220) Deferred compensation plan (487) 259 Exercise of employee stock options 3,805 Cash distributions declared ($1.088 per common share) (26,558) Redemption of operating partnership units 2,129 Amortization of officers' loan and deferred compensation 1,222 1,222 -------------------------------- Balance at September 30, 2000 (unaudited) (5,939) 437,574 ================================
RECONCILIATION OF SHARES AND UNITS OUTSTANDING, AND DILUTION COMPUTATION UNAUDITED
Common Stock Op Units Basic Shares ------------ -------- ------------ Balance at December 31, 1997 12,292,311 2,383,284 14,675,595 Public Offering 11,500,000 11,500,000 Deferred Compensation Programs 159,515 159,515 Acquisiton of 711 Third Ave. fee interest 44,772 44,772 ---------- --------- ---------- Balance at December 31, 1998 23,951,826 2,428,056 26,379,882 Deferred Compensation Programs 232,391 232,391 ---------- --------- ---------- Balance at December 31, 1999 24,184,217 2,428,056 26,612,273 Option/OP Units Converted 299,776 (120,541) 179,235 Compensation Program 32,201 32,201 Unexercised Option Share Equivalents Preferred Stock "If Converted" Method to common stock ---------- --------- ---------- Balance at September 30, 2000 24,516,194 2,307,515 26,823,709 ========== ========= ========== Dilution Factor Diluted Shares --------------- -------------- Balance at December 31, 1997 Public Offering Deferred Compensation Programs Acquisiton of 711 Third Ave. fee interest Balance at December 31, 1998 26,379,882 Deferred Compensation Programs 232,391 ---------- Balance at December 31, 1999 26,612,273 Option/OP Units Converted (98,268) 80,967 Compensation Program (11,383) 20,818 Unexercised Option Share Equivalents 349,214 349,214 Preferred Stock "If Converted" Method to common stock 4,699,000 4,699,000 ------------- ---------- Balance at September 30, 2000 4,938,563 31,762,272 ============= ==========
Page 15 COMPARATIVE COMPUTATION OF FFO AND FAD Unaudited
($000's omitted - except per share data) Three Months Ended September 30 2000 1999 % Change ---- ---- -------- FUNDS FROM OPERATIONS: Net Income before Minority Interests 14,270 11,641 23% Add: Depreciation and Amortization 8,300 7,677 8% FFO adjustment for Joint Ventures 842 120 602% Less: Dividends on Preferred Shares 2,300 2,300 0% Minority Interest of BMW - 354 -100% Non Real Estate Depreciation/Amortization of Finance Costs 1,042 878 19% ------ ------ FUNDS FROM OPERATIONS - BASIC 20,070 15,906 26% Add: Dividends on Preferred Shares 2,300 2,300 ------ ------ FUNDS FROM OPERATIONS - DILUTED 22,370 18,206 Funds From Operations per Diluted Weighted Average Unit, Common Share and Common Share Equivalent Outstanding 0.70 0.58 21% FUNDS AVAILABLE FOR DISTRIBUTION: FFO 20,070 15,906 26% Add: Non Real Estate Depreciation (1) 1,042 771 35% 2% Allowance for S/L Tenant Credit Loss (1) 199 708 -72% Straight-line Ground Rent 312 442 -29% Non-cash Deferred Compensation 422 368 15% FAD adjustment for Joint Ventures (631) 8 Less: Straight-line Rental Income (1) 2,237 1,907 17% Free Rent - Occupied (Net of Amortization, incl. First Cycle) (1) 1,127 1,518 -26% Amortization of Mortgage Investment Discount 1,119 - Second Cycle Tenant Improvement & Leasing Commission on Existing Space (1) 3,118 1,933 61% Recurring Building Improvements (1) 871 1,032 -16% ------ ------ FUNDS AVAILABLE FOR DISTRIBUTION BEFORE REDEVELOPMENT & FIRST CYCLE LEASING COSTS 12,942 11,813 10% Funds Available for Distribution per Diluted Weighted Average Unit and Common Share 0.47 0.44 7% Dividend per Common Share 0.3625 0.35 4% FIRST CYCLE LEASING COSTS Tenant Improvement & Leasing Commissions (1) 680 5,331 -87% FUNDS AVAILABLE FOR DISTRIBUTION AFTER FIRST CYCLE LEASING COSTS 12,262 6,482 89% Funds Available for Distribution per Diluted Weighted Average Unit and Common Share 0.45 0.24 85% Payout Ratio of Funds From Operations 51.85% 60.37% -14% Payout Ratio of Funds Available for Distribution before First Cycle 76.47% 79.13% -3% REDEVELOPMENT COSTS (1) 3,778 8,963 -58% Nine Months ($000's omitted - except per share data) Three Months Ended June 30 Ended Sept 30 2000 % Change 2000 ---- -------- ---- FUNDS FROM OPERATIONS: Net Income before Minority Interests 12,344 16% 38,581 Add: Depreciation and Amortization 8,403 -1% 24,519 FFO adjustment for Joint Ventures 917 -8% 2,468 Less: Dividends on Preferred Shares 2,300 0% 6,900 Minority Interest of BMW - - Non Real Estate Depreciation/Amortization of Finance Costs 1,040 0% 3,105 ------ ------ FUNDS FROM OPERATIONS - BASIC 18,324 10% 55,563 Add: Dividends on Preferred Shares 2,300 6,900 ------ ------ FUNDS FROM OPERATIONS - DILUTED 20,624 62,463 Funds From Operations per Diluted Weighted Average Unit, Common Share and Common Share Equivalent Outstanding 0.65 8% 1.97 FUNDS AVAILABLE FOR DISTRIBUTION: FFO 18,324 10% 55,563 Add: Non Real Estate Depreciation (1) 1,040 0% 3,105 2% Allowance for S/L Tenant Credit Loss (1) 240 -17% 672 Straight-line Ground Rent 441 -29% 1,194 Non-cash Deferred Compensation 386 9% 1,113 FAD adjustment for Joint Ventures (494) 28% (1,989) Less: Straight-line Rental Income (1) 2,356 -5% 6,903 Free Rent - Occupied (Net of Amortization, incl. First Cycle) (1) 1,554 -27% 3,875 Amortization of Mortgage Investment Discount 1,107 1% 2,226 Second Cycle Tenant Improvement & Leasing Commission on Existing Space (1) 3,289 -5% 9,219 Recurring Building Improvements (1) 546 60% 1,497 ------ ------ FUNDS AVAILABLE FOR DISTRIBUTION BEFORE REDEVELOPMENT & FIRST CYCLE LEASING COSTS 11,085 17% 35,938 Funds Available for Distribution per Diluted Weighted Average Unit and Common Share 0.41 16% 1.33 Dividend per Common Share 0.3625 0% 1.088 FIRST CYCLE LEASING COSTS Tenant Improvement & Leasing Commissions (1) 4,206 -84% 13,586 FUNDS AVAILABLE FOR DISTRIBUTION AFTER FIRST CYCLE LEASING COSTS 6,879 78% 22,352 Funds Available for Distribution per Diluted Weighted Average Unit and Common Share 0.25 77% 0.83 Payout Ratio of Funds From Operations 55.80% -7% 55.30% Payout Ratio of Funds Available for Distribution before First Cycle 88.44% -14% 81.89% REDEVELOPMENT COSTS (1) 3,254 16% 10,266
(1) Adjusted for Minority Interest in Properties less than 100% owned Page 16 SELECTED FINANCIAL DATA CAPITALIZATION ANALYSIS HISTORICAL UNAUDITED
($000's omitted) SEP-00 SEP-99 % CHANGE JUN-00 ------ ------ -------- ------ MARKET CAPITALIZATION Components of Market Capitalization: COMMON EQUITY: Common Shares Outstanding 24,516 24,204 1% 24,373 OP Units Outstanding 2,308 2,428 -5% 2,389 ---------- ---------- ---------- TOTAL COMMON EQUITY (SHARES AND UNITS) 26,824 26,632 1% 26,762 Share Price at (End of Period) 28.06 20.50 37% 26.73 ---------- ---------- ---------- Equity Market Value 752,740 545,950 38% 715,476 PREFERRED EQUITY AT LIQUIDATION VALUE: 115,000 115,000 0% 115,000 REAL ESTATE DEBT Property Level Mortgage Debt 345,351 337,190 2% 346,294 Company's portion of Joint Venture Mortgages 111,040 39,540 181% 107,048 Minority Interest in Company's Mortgage - BMW -- (15,379) -100% Outstanding Balance on - Secured Credit Line 27,752 -- 42,752 Outstanding Balance on - Unsecured Credit Line 99,000 61,000 62% 103,000 ---------- ---------- ---------- Total Combined Debt 583,143 422,351 38% 599,094 Total Market Cap (Debt & Equity) 1,450,883 1,083,301 34% 1,429,570 ========== ========== ========== LINES OF CREDIT AVAILABILITY Senior Unsecured Line of Credit Maximum Line Available 250,000 140,000 250,000 Letters of Credit issued -- 1,000 -- Outstanding Balance 99,000 61,000 103,000 ---------- ---------- ---------- Net Line Availability 151,000 78,000 147,000 ---------- ---------- ---------- Secured Line of Credit Maximum Line Available 50,000 50,000 Outstanding Balance 27,752 42,752 ---------- ---------- Prudential Line Availability 22,248 N/A 7,248 ---------- ---------- Total Availability under Lines of Credit 173,248 154,248 ---------- ---------- RATIO ANALYSIS- CONSOLIDATED BASIS Debt to Market Cap Ratio 35.24% 37.60% 37.21% Debt to Gross Real Estate Book Ratio (1) 48.23% 45.09% 49.16% Secured Real Estate Debt to Secured Assets Gross Book (1) 55.77% 58.62% 56.34% Unsecured Debt to Unencumbered Assets-Gross Book Value (1) 32.86% 19.96% 34.40% Secured Non Real Estate Debt to Secured Assets Book (1) 46.33% N/A 49.16% RATIO ANALYSIS- JOINT VENTURES ALLOCATED Combined Debt to Market Cap Ratio 40.19% 38.99% 41.91% Debt to Gross Real Estate Book Ratio (1) 50.96% 46.06% 51.42% Secured Debt to Secured Assets Gross Book (1) 57.99% 59.32% 57.93% Unsecured Debt to Unencumbered Assets-Gross Book Value (1) 32.86% 19.96% 34.40% Secured Line of Credit to Structured Finance Assets (1) 46.33% N/A 49.16% ($000's omitted) % CHANGE MAR-00 % CHANGE -------- ------ -------- MARKET CAPITALIZATION Components of Market Capitalization: COMMON EQUITY: Common Shares Outstanding 1% 24,239 1% OP Units Outstanding -3% 2,408 -4% ---------- TOTAL COMMON EQUITY (SHARES AND UNITS) 0% 26,647 1% Share Price at (End of Period) 5% 23.75 18% ---------- Equity Market Value 5% 632,862 19% PREFERRED EQUITY AT LIQUIDATION VALUE: 0% 115,000 0% REAL ESTATE DEBT Property Level Mortgage Debt 0% 332,262 4% Company's portion of Joint Venture Mortgages 4% 99,348 12% Minority Interest in Company's Mortgage - BMW -- -- Outstanding Balance on - Secured Credit Line -35% 37,752 -26% Outstanding Balance on - Unsecured Credit Line -4% 104,000 -5% ---------- Total Combined Debt -3% 573,362 2% Total Market Cap (Debt & Equity) 1% 1,321,224 10% =========== LINES OF CREDIT AVAILABILITY Senior Unsecured Line of Credit Maximum Line Available 140,000 Letters of Credit issued -- Outstanding Balance 104,000 ---------- Net Line Availability 36,000 ---------- Secured Line of Credit Maximum Line Available 50,000 Outstanding Balance 37,752 ---------- Prudential Line Availability 12,248 ---------- Total Availability under Lines of Credit 48,248 ---------- RATIO ANALYSIS- CONSOLIDATED BASIS Debt to Market Cap Ratio 38.79% Debt to Gross Real Estate Book Ratio (1) 48.28% Secured Real Estate Debt to Secured Assets Gross Book (1) 56.44% Unsecured Debt to Unencumbered Assets-Gross Book Value (1) 33.04% Secured Non Real Estate Debt to Secured Assets Book (1) 49.88% RATIO ANALYSIS- JOINT VENTURES ALLOCATED Combined Debt to Market Cap Ratio 43.40% Debt to Gross Real Estate Book Ratio (1) 50.49% Secured Debt to Secured Assets Gross Book (1) 57.86% Unsecured Debt to Unencumbered Assets-Gross Book Value (1) 33.04% Secured Line of Credit to Structured Finance Assets (1) 49.88%
(1) Excludes property under capital lease Page 17 SELECTED FINANCIAL DATA PROPERTY NOI AND COVERAGE RATIOS UNAUDITED
($000's omitted) Three Months Ended September 30 2000 1999 +/- % Change ---- ---- --- -------- FUNDS FROM OPERATIONS: 20,070 15,906 4,164 26% Less: Non - Building Revenue 6,023 2,238 3,785 169% Plus: 2% Reserve for Tenant Credit Loss* 199 708 (509) -72% Interest Expense (incl. Capital Lease Int.)* 10,698 7,497 3,201 43% Non Real Estate Depreciation* 1,042 771 271 35% MG&A Expense 2,540 2,979 (439) -15% Preferred Dividend 2,300 2,300 -- 0% ------ ------ ------ GAAP NOI 30,826 27,923 2,903 10% CASH ADJUSTMENTS Less: Free Rent (Net of Amortization)* 1,127 1,518 (391) -26% Straightline Revenue Adjustment* 2,237 1,907 330 17% Plus: Ground Lease Straight-line Adjustment 312 442 (130) -29% ------ ------ ------ CASH NOI 27,774 24,940 2,835 11% OPERATING MARGINS Real Estate Revenue, net* 55,936 51,447 4,489 9% GAAP NOI/Real Estate Revenue, net 55.11% 54.27% Cash NOI/Real Estate Revenue, net 49.65% 48.48% GAAP NOI before Ground Rent/Real Estate Revenue, net 60.77% 60.46% Cash NOI before Ground Rent/Real Estate Revenue, net 54.75% 53.80% COMPONENTS OF DEBT AND FIXED CHARGES Interest on Fixed Rate Loans* 4,376 3,732 644 17% Interest on Floating Rate Loans* 6,322 4,040 2,282 56% Fixed Amortization Principal Payments 943 545 398 73% ------ ------ ------ TOTAL DEBT SERVICE 11,641 8,317 3,323 40% Payments under Ground Lease Arrangements 2,852 2,737 115 4% Preferred Stock Dividend 2,300 2,300 -- 0% ------ ------ ------ TOTAL FIXED CHARGES 16,793 13,354 3,439 26% Interest Coverage Ratio 3.23 3.51 Debt Service Coverage ratio 2.97 3.28 Fixed Charge Coverage ratio 2.06 2.04 ($000's omitted) Three Months Ended June 30 2000 +/- % Change ---- --- -------- FUNDS FROM OPERATIONS: 18,324 1,746 10% Less: Non - Building Revenue 5,346 677 13% Plus: 2% Reserve for Tenant Credit Loss* 240 (41) -17% Interest Expense (incl. Capital Lease Int.)* 10,053 645 6% Non Real Estate Depreciation* 1,040 2 0% MG&A Expense 3,190 (650) -20% Preferred Dividend 2,300 -- 0% ------ ------ GAAP NOI 29,801 1,025 3% CASH ADJUSTMENTS Less: Free Rent (Net of Amortization)* 1,554 (427) -27% Straightline Revenue Adjustment* 2,356 (119) -5% Plus: Ground Lease Straight-line Adjustment 441 (129) -29% ------ ------ CASH NOI 26,332 1,442 5% OPERATING MARGINS Real Estate Revenue, net* 52,614 3,322 6% GAAP NOI/Real Estate Revenue, net 56.64% Cash NOI/Real Estate Revenue, net 50.05% GAAP NOI before Ground Rent/Real Estate Revenue, net 62.65% Cash NOI before Ground Rent/Real Estate Revenue, net 55.21% COMPONENTS OF DEBT AND FIXED CHARGES Interest on Fixed Rate Loans* 4,063 313 8% Interest on Floating Rate Loans* 5,990 333 6% Fixed Amortization Principal Payments 885 58 7% ------ ------ TOTAL DEBT SERVICE 10,938 702 6% Payments under Ground Lease Arrangements 2,769 83 3% Preferred Stock Dividend 2,300 -- 0% ------ ------ TOTAL FIXED CHARGES 16,007 786 5% Interest Coverage Ratio 3.15 Debt Service Coverage ratio 2.90 Fixed Charge Coverage ratio 1.98
* Adjusted for properties reported in 1999 on a consolidated basis which are less than wholly owned and which are not reflected in the unconsolidated joint ventures. Page 18 2000 SAME STORE SELECTED FINANCIAL DATA
($000's omitted) Three Months Ended September 30 2000 1999 +/- % Change ---- ---- --- -------- Rental Revenue 40,501 36,638 3,863 11% Credit Loss (144) (643) 499 -78% Signage Rent 496 559 (63) -11% Escalation & Reimbursement Revenues 6,424 4,968 1,456 29% Investment & Other Income 197 673 (476) -71% ------- ------- ------- Total Revenues 47,474 42,195 5,279 13% Operating Expense 12,266 10,237 2,029 20% Ground Rent 3,164 3,159 5 0% Real Estate Taxes 6,140 5,905 235 4% ------- ------- ------- Total Operating Expenses 21,570 19,301 2,269 12% EBITDA 25,904 22,894 3,010 13% Interest 5,101 4,849 252 5% Depreciation & Amortization 6,257 5,895 362 6% Income Before Minority Interest 14,546 12,150 2,396 20% Plus: Real Estate Depreciation & Amortization 6,016 5,642 374 7% ------- ------- ------- FUNDS FROM OPERATIONS: 20,562 17,792 2,770 16% Less: Non - Building Revenue 168 427 (259) -61% Plus: 2% Reserve for Tenant Credit Loss 144 643 (499) -78% Interest Expense 5,101 4,849 252 5% Non Real Estate Depreciation 241 253 (12) -5% ------- ------- ------- GAAP NOI 25,880 23,110 2,770 12% CASH ADJUSTMENTS Less: Free Rent (Net of Amortization) 994 1,275 (281) -22% Straightline Revenue Adjustment 1,690 1,714 (24) -1% Plus: Ground Lease Straight-line Adjustment 312 442 (130) -29% ------- ------- ------- CASH NOI 23,508 20,563 2,945 14% OPERATING MARGINS GAAP NOI to Real Estate Revenue, net 54.54% 54.49% Cash NOI to Real Estate Revenue, net 49.54% 48.48% GAAP NOI before Ground Rent/Real Estate Revenue, net 61.21% 61.94% Cash NOI before Ground Rent/Real Estate Revenue, net 55.55% 54.89%
($000's omitted) Three Months Ended June 30 2000 +/- % Change ---- --- -------- Rental Revenue 39,904 597 1% Credit Loss (144) (0) 0% Signage Rent 597 (101) -17% Escalation & Reimbursement Revenues 4,240 2,184 52% Investment & Other Income 252 (55) -22% ------- ------- Total Revenues 44,849 2,625 6% Operating Expense 10,500 1,766 17% Ground Rent 3,159 5 0% Real Estate Taxes 5,870 270 5% ------- ------- Total Operating Expenses 19,529 2,041 10% EBITDA 25,320 584 2% Interest 5,159 (58) -1% Depreciation & Amortization 6,515 (258) -4% Income Before Minority Interest 13,646 900 7% Plus: Real Estate Depreciation & Amortization 6,252 (236) -4% ------- ------- FUNDS FROM OPERATIONS: 19,898 664 3% Less: Non - Building Revenue 192 (24) -12% Plus: 2% Reserve for Tenant Credit Loss 144 -- 0% Interest Expense 5,159 (58) -1% Non Real Estate Depreciation 263 (22) -8% ------- ------- GAAP NOI 25,272 608 2% CASH ADJUSTMENTS Less: Free Rent (Net of Amortization) 1,667 (673) -40% Straightline Revenue Adjustment 1,869 (179) -10% Plus: Ground Lease Straight-line Adjustment 441 (129) -29% ------- ------- CASH NOI 22,177 1,331 6% OPERATING MARGINS GAAP NOI to Real Estate Revenue, net 56.41% Cash NOI to Real Estate Revenue, net 49.50% GAAP NOI before Ground Rent/Real Estate Revenue, net 63.46% Cash NOI before Ground Rent/Real Estate Revenue, net 55.57%
Page 19 DEBT SUMMARY SCHEDULE UNAUDITED
($000's omitted) FIXED RATE SECURED DEBT Principal O/S PROPERTY 9/30/2000 Coupon --------- ------ 673 First Avenue 12,704 9.00% 470 Park Avenue South 9,838 8.25% 50 West 23rd Street 21,000 7.33% CIBC (against 1414 Ave. of Americas, 633 Third Avenue, and 70 W. 36th St.) 33,950 7.90% 711 Third Avenue 49,225 8.13% 555 West 57th Street (Libor collar of 6.10% - 6.58% + 200bps) 69,775 8.58% 420 Lexington Avenue (Libor + 202bps) (interest rate cap of Libor 6.5%) 55,000 8.52% 875 Bridgeport Avenue, CT (1031 exchange asset) 14,909 8.32% CIGNA (1412 Broadway) 52,000 7.62% ------- ----- TOTAL FIXED RATE SECURED DEBT 318,401 8.18% wtd avg FLOATING RATE SECURED DEBT Madison Properties (Libor + 150bps) 26,950 8.13% Prudential Line of Credit (Libor + 125bps) 27,752 7.88% ------- ----- TOTAL FLOATING RATE SECURED DEBT 54,702 8.00% wtd avg UNSECURED FLOATING RATE DEBT Senior Unsecured Line of Credit 99,000 8.15% Total Floating Rate Debt Outstanding 153,702 8.10% wtd avg -------- ----- TOTAL DEBT 472,103 8.15% wtd avg WEIGHTED AVERAGE BALANCE OUTSTANDING 497,175 WEIGHTED AVERAGE INTEREST RATE 8.15% ($000's omitted) FIXED RATE SECURED DEBT 2000 2000 Annual Principal Maturity Due at Property Payment Repayment Date Maturity ------- --------- ---- -------- 673 First Avenue 3,985 2,749 12/13/2003 2,000 470 Park Avenue South 1,207 383 4/1/2004 8,285 50 West 23rd Street 1,539 -- 8/1/2007 19,234 CIBC (against 1414 Ave. of Americas, 633 Third Avenue, and 70 W. 36th St.) 4,013 -- 5/1/2009 29,577 711 Third Avenue 4,067 65 9/10/2005 46,905 555 West 57th Street (Libor collar of 6.10% - 6.58% + 200bps) -- 394 11/1/2004 66,959 420 Lexington Avenue (Libor + 202bps) (interest rate cap of Libor 6.5%) -- -- 5/21/2001 55,000 875 Bridgeport Avenue, CT (1031 exchange asset) 645 16 5/10/2025 5,466 CIGNA (1412 Broadway) 3,962 -- 5/1/2006 47,854 ------ ----- Total Fixed Rate Secured Debt 19,418 3,607 FLOATING RATE SECURED DEBT Madison Properties (Libor + 150bps) -- 5/31/2001 26,950 Prudential Line of Credit (Libor + 125bps) -- 12/31/2000 27,752 Total Floating Rate Secured Debt UNSECURED FLOATING RATE DEBT Senior Unsecured Line of Credit -- 6/27/2003 99,000 Total Floating Rate Debt Outstanding -- Total Debt Weighted Average Balance Outstanding -- Weighted Average Interest Rate -- ($000's omitted) FIXED RATE SECURED DEBT Earliest Contractual Partner Property Prepayment Date Lockouts thru -------------------- ------------- 673 First Avenue Open Aug-09 470 Park Avenue South Open Aug-09 50 West 23rd Street Aug-01 N/A CIBC (against 1414 Ave. of Americas, 633 Third Avenue, and 70 W. 36th St.) Apr-03 N/A 711 Third Avenue Jun-04 N/A 555 West 57th Street (Libor collar of 6.10% - 6.58% + 200bps) Open N/A 420 Lexington Avenue (Libor + 202bps) (interest rate cap of Libor 6.5%) Open N/A 875 Bridgeport Avenue, CT (1031 exchange asset) Open N/A CIGNA (1412 Broadway) Apr-00 N/A Total Fixed Rate Secured Debt FLOATING RATE SECURED DEBT Madison Properties (Libor + 150bps) Open Prudential Line of Credit (Libor + 125bps) Open Total Floating Rate Secured Debt UNSECURED FLOATING RATE DEBT Senior Unsecured Line of Credit Total Floating Rate Debt Outstanding Total Debt Weighted Average Balance Outstanding Weighted Average Interest Rate
SUMMARY OF JOINT VENTURE DEBT
Principal O/S 2000 2000 ------------------------------------- Annual Principal Gross Principal SLG Share Coupon Payment Repayment --------------- --------- ------ ------- --------- JOINT VENTURE DEBT 90 Broad JV (Libor + 175bps) 32,000 11,200 8.37% - 1250 Broadway JV (Libor + 300bps) 64,650 32,260 9.63% - 321 W 44th JV (Libor + 250bps) 22,000 7,700 9.13% - 100 Park Avenue JV 120,000 59,880 8.00% - -------- ------- ----- TOTAL JOINT VENTURE DEBT 238,650 111,040 8.59% WEIGHTED AVERAGE BALANCE OUTSTANDING WITH SLG JV DEBT ALLOCATED 606,436 WEIGHTED AVERAGE INTEREST RATE WITH SLG JV DEBT ALLOCATED 8.25% TOTAL FIXED RATE DEBT / TOTAL DEBT (EXCL. LOC) 78% TOTAL FIXED RATE DEBT / TOTAL DEBT (EXCL. LOC AND FLOATING ASSETS) 83% Maturity Due at Earliest Contractual Partner Date Maturity Prepayment Date Lockouts thru -------- -------- -------------------- --------------- JOINT VENTURE DEBT 90 Broad JV (Libor + 175bps) 3/31/2002 11,200 Open 1250 Broadway JV (Libor + 300bps) 8/30/2002 32,260 Open 321 W 44th JV (Libor + 250bps) 4/30/2003 7,700 Open 100 Park Avenue JV TOTAL JOINT VENTURE DEBT WEIGHTED AVERAGE BALANCE OUTSTANDING WITH SLG JV DEBT ALLOCATED WEIGHTED AVERAGE INTEREST RATE WITH SLG JV DEBT ALLOCATED TOTAL FIXED RATE DEBT / TOTAL DEBT (EXCL. LOC) TOTAL FIXED RATE DEBT / TOTAL DEBT (EXCL. LOC AND FLOATING ASSETS)
Page 20 SUMMARY OF GROUND LEASE ARRANGEMENTS Unaudited
($000's omitted) 2000 CASH 2001 CASH DEFERRED LAND YEAR OF PROPERTY PAYMENT (000s) PAYMENT (000s) LEASE OBLIGATIONS (1) MATURITY -------- -------------- -------------- --------------------- -------- OPERATING LEASES 673 1st Avenue 2,789 3,010 11,463 2037 1140 Avenue of Americas (2) 348 348 -- 2016 (3) 420 Lexington (2) 7,074 7,074 -- 2008 (4) 711 3rd Avenue (2) (5) 775 1,163 1,342 2032 ------- ------ ------ 10,986 11,595 12,805 ======= ====== ====== 2000 CASH 2001 CASH CAPITALIZED YEAR OF PROPERTY PAYMENT (000s) PAYMENT (000s) LEASE OBLIGATIONS (1) MATURITY -------- -------------- -------------- --------------------- -------- CAPITALIZED LEASE 673 1st Avenue 1,177 1,290 15,242 2037 ====== ====== ======
(1) As per the balance sheet at September 30, 2000. (2) These ground leases are classified as operating leases and, therefore, do not appear on the balance sheet as an obligation. (3) The Company has a unilateral option to extend the ground lease for an additional 50 years, to 2066. (4) Subject to renewal at the Company's option through 2029. (5) Excludes portion payable to SL Green as owner of 50% leasehold. 21 SELECTED PROPERTY DATA
Rentable % of Total Properties Submarket Ownership Sq. Feet Sq. Feet - ---------- --------- --------- -------- ---------- PROPERTIES 100% OWNED "SAME STORE" 673 First Avenue Grand Central South Leasehold Interest 422,000 4.62 470 Park Avenue South Park Avenue South/ Flatiron Fee Interest 260,000 2.85 70 W. 36th Street Garment Fee Interest 151,000 1.65 1414 Avenue of the Americas Rockefeller Center Fee Interest 111,000 1.22 1372 Broadway Garment Fee Interest 508,000 5.56 1140 A of A Rockefeller Center Leasehold Interest 191,000 2.09 50 W. 23rd Street Chelsea Fee Interest 333,000 3.65 110 East 42nd Street Grand Central Fee Interest 251,000 2.75 17 Battery Place World Trade/ Battery Fee Interest (1) 811,000 8.88 633 Third Avenue (condo interest) Grand Central North Fee Interest (1) 41,000 0.45 1466 Broadway Times Square Fee Interest 289,000 3.17 420 Lexington Ave (Graybar) Grand Central North Operating Sublease 1,188,000 13.01 440 Ninth Avenue Garment Fee Interest 339,000 3.71 711 Third Avenue Grand Central North Operating Sublease (2) 524,000 5.74 1412 Broadway Times Square South Fee Interest 389,000 4.26 --------- SUBTOTAL / WEIGHTED AVERAGE 5,808,000 ACQUIRED 1999 555 West 57th Midtown West Fee Interest 941,000 10.31 286 Madison Avenue Grand Central South Fee Interest 112,000 1.23 290 Madison Avenue Grand Central South Fee Interest 36,800 0.40 292 Madison Avenue Grand Central South Fee Interest 187,000 2.05 --------- SUBTOTAL / WEIGHTED AVERAGE 1,276,800 TOTAL/ WEIGHTED AVERAGE PROPERTIES 100% OWNED 7,084,800 PROPERTIES LESS THAN 100% OWNED UNCONSOLIDATED 90 Broad Street - 35% Financial Fee Interest 339,000 3.71 1250 Broadway - 50% Penn Station Fee Interest 670,000 7.34 100 Park Avenue - 50% Grand Central South Fee Interest 834,000 9.13 321 West 44th Street -35% Times Square Fee Interest 203,000 2.22 --------- SUBTOTAL / WEIGHTED AVERAGE 2,046,000 GRAND TOTAL/ WEIGHTED AVERAGE 9,130,800 100.00 GRAND TOTAL - SLG SHARE OF ANNUALIZED RENT
Percent Occupied ------------------------------------------------------------------- 9/30/99 or As Properties 9/30/2000 6/30/2000 3/31/2000 Later Acquired - ---------- --------- --------- --------- -------------- PROPERTIES 100% OWNED "SAME STORE" 673 First Avenue 100 100 100 100 470 Park Avenue South 99 99 98 99 70 W. 36th Street 98 99 98 100 1414 Avenue of the Americas 100 100 95 98 1372 Broadway 99 100 100 100 1140 A of A 100 100 100 100 50 W. 23rd Street 99 100 99 100 110 East 42nd Street 99 99 99 100 17 Battery Place 93 93 93 87 633 Third Avenue (condo interest) 100 100 100 100 1466 Broadway 92 93 93 95 420 Lexington Ave (Graybar) 99 98 98 91 440 Ninth Avenue 94 99 94 100 711 Third Avenue 100 100 100 96 1412 Broadway 98 97 96 94 --- --- --- --- SUBTOTAL / WEIGHTED AVERAGE 98 98 97 95 Acquired 1999 555 West 57th 100 100 100 100 286 Madison Avenue 99 99 98 95 290 Madison Avenue 100 100 83 55 292 Madison Avenue 95 100 100 97 --- --- --- --- SUBTOTAL / WEIGHTED AVERAGE 99 100 99 98 TOTAL/ WEIGHTED AVERAGE PROPERTIES 100% OWNED 98 98 98 96 PROPERTIES LESS THAN 100% OWNED UNCONSOLIDATED 90 Broad Street - 35% 99 98 89 82 1250 Broadway - 50% 99 100 100 97 100 Park Avenue - 50% 99 99 99 97 321 West 44th Street -35% 98 98 98 97 --- --- --- --- SUBTOTAL / WEIGHTED AVERAGE 99 99 98 95 GRAND TOTAL/ WEIGHTED AVERAGE 98 98 98 95 GRAND TOTAL - SLG SHARE OF ANNUALIZED RENT
Annualized Annualized Annualized Rent as % of Rent as % of Number of Properties Rent ($'s) Wholly Owned SLG Interests Tenants - ---------- ---------- ------------ ------------- ------- PROPERTIES 100% OWNED "SAME STORE" 673 First Avenue 12,153,972 6.33 5.56 14 470 Park Avenue South 6,832,403 3.56 3.12 28 70 W. 36th Street 3,458,648 1.80 1.58 35 1414 Avenue of the Americas 4,252,525 2.22 1.94 28 1372 Broadway 12,930,904 6.74 5.91 28 1140 A of A 6,166,799 3.21 2.82 26 50 W. 23rd Street 7,219,515 3.76 3.30 18 110 East 42nd Street 7,809,854 4.07 3.57 33 17 Battery Place 16,016,007 8.35 7.32 55 633 Third Avenue (condo interest) 1,567,922 0.82 0.72 3 1466 Broadway 9,655,592 5.03 4.42 117 420 Lexington Ave (Graybar) 39,826,578 20.75 18.21 252 440 Ninth Avenue 7,065,782 3.68 3.23 16 711 Third Avenue 17,243,967 8.99 7.89 23 1412 Broadway 11,329,272 5.90 5.18 120 SUBTOTAL / WEIGHTED AVERAGE 163,529,740 85.22 74.78 796 Acquired 1999 555 West 57th 18,211,267 9.49 8.33 25 286 Madison Avenue 3,048,355 1.59 1.39 38 290 Madison Avenue 1,101,589 0.57 0.50 4 292 Madison Avenue 6,008,743 3.13 2.75 18 SUBTOTAL / WEIGHTED AVERAGE 28,369,954 14.78 12.97 85 TOTAL/ WEIGHTED AVERAGE PROPERTIES 100% OWNED 191,899,694 100.00 87.76 881 PROPERTIES (100% OWNED) UNCONSOLIDATED 90 Broad Street - 35% 8,437,323 1.35 45 1250 Broadway - 50% 16,937,203 3.86 29 100 Park Avenue - 50% 28,306,687 6.46 37 321 West 44th Street -35% 3,554,681 0.57 26 ----------- ------ ---- SUBTOTAL / WEIGHTED AVERAGE 57,235,894 12.24 137 GRAND TOTAL/ WEIGHTED AVERAGE 249,135,588 1018 GRAND TOTAL - SLG SHARE OF ANNUALIZED RENT 218,673,597 100.00
(1) Condominium Unit (2) Including Ownership of 50% in Building Fee Page 22
LARGEST TENANTS BY SQUARE FEET LEASED - ------------------------------------------------------------------------------------------------------------------------------------ WHOLLY OWNED Lease Tenant Property Expiration ------ -------- ---------- The City of New York 17 Battery Place 12/7/2000 BMW of Manhattan, Inc. 555 West 57th Street 7/31/2012 City University of New York-CUNY 555 West 57th Street 5/31/10 & 1/29/15 Metro North Commuter Railroad Co. 420 Lexington Avenue 5/14/08 & 1/31/16 St. Luke's Roosevelt Hospital 555 West 57th Street 6/30/2014 C.B.S., Inc. 555 West 57th Street 12/31/03 & 6/30/10 New York Presbyterian Hospital 555 West 57th Street & 673 First Avenue 8/31/06 & 12/14/09 Ross Stores 1372 Broadway 5/31/2007 Ann Taylor Inc. 1372 Broadway 7/31/2010 Crain Communications Inc. 711 Third Avenue 1/31/2009 Parade Publications, Inc. 711 Third Avenue 8/31/2010 Ketchum, Inc. 711 Third Avenue 11/30/2015 Kallir, Phillips, Ross Inc. 673 First Avenue 6/30/2004 UNICEF 673 First Avenue 12/31/03 & 12/31/12 New York Life Insurance Company 420 Lexington Avenue 6/30/2010 Greater New York Hospital 555 West 57th Street 3/31/2014 Wildcat Service Corporation 17 Battery Place 6/30/2009 Gibbs & Cos Inc. 50 West 23rd Street 8/31/2005 Cipriani 42nd Street, LLC 110 East 42nd Street 12/31/2008 Young & Rubicam, Inc. 290 & 292 Madison Avenue 8/31/15 & 9/30/15 MCI International 17 Battery Place 10/31/2001 Capital Mercury Shirt 1372 Broadway 7/31/2005 NYC, Board of Education 50 West 23rd Street 7/4/2010 Newport News 711 Third Avenue 3/31/11 & 7/31/11 Leslie Fay Companies, Inc. 1412 Broadway 8/31/2008 Dow Jones & Co. Inc. 420 Lexington Avenue 7/31/2001 TOTAL WHOLLY OWNED PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ JOINT VENTURE PROPERTIES (1) The City of New York (if combined) 1250 Broadway & 17 Battery Place 9/30/07, 12/07 & 2/28/06 J&W Seligman & Co., Inc. 100 Park Avenue 1/31/2009 Visiting Nurse Service of NY 1250 Broadway 8/31/2006 Philip Morris Management Corporation 100 Park Avenue 12/07 & 3/7/01 Information Builders Inc 1250 Broadway 3/31/2003 Interep National Radio Sales 100 Park Avenue 3/31/2005 MCI International ( if combined) 100 Park Avenue & 17 Battery Place 10/31/01 & 8/31/04 TOTAL WHOLLY OWNED PORTFOLIO + ALLOCATED JV PROPERTIES - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ % of % of % of WHOLLY OWNED Wholly Wholly Aggregate Total Owned Owned SLG Share of SLG Share of Leased Leased Annualized Annualized Annualized Annualized Tenant Square Feet Square Feet Rent Rent ($) Rent($) Rent ------ ----------- ----------- ---------- ----------- ------------ ----------- The City of New York 287,929 4.14 3.15 6,046,551 -- BMW of Manhattan, Inc. 227,782 3.27 1.45 2,775,555 2,775,555 1.27 City University of New York-CUNY 143,061 2.06 1.77 3,387,769 3,387,769 1.55 Metro North Commuter Railroad Co. 134,687 1.94 1.69 3,251,702 3,251,702 1.49 St. Luke's Roosevelt Hospital 133,700 1.92 1.56 2,993,732 2,993,732 1.37 C.B.S., Inc. 127,320 1.83 1.25 2,396,017 2,396,017 1.10 New York Presbyterian Hospital 99,650 1.43 1.28 2,447,534 2,447,534 1.12 Ross Stores 98,830 1.42 1.27 2,445,048 2,445,048 1.12 Ann Taylor Inc. 93,020 1.34 1.32 2,526,797 2,526,797 1.16 Crain Communications Inc. 90,531 1.30 1.55 2,978,840 2,978,840 1.36 Parade Publications, Inc. 82,444 1.18 1.03 1,978,656 1,978,656 0.90 Ketchum, Inc. 81,423 1.17 1.65 3,167,613 3,167,613 1.45 Kallir, Phillips, Ross Inc. 80,000 1.15 1.37 2,635,292 2,635,292 1.21 UNICEF 80,000 1.15 1.35 2,592,750 2,592,750 1.19 New York Life Insurance Company 75,373 1.08 1.31 2,523,438 2,523,438 1.15 Greater New York Hospital 74,937 1.08 1.14 2,187,019 2,187,019 1.00 Wildcat Service Corporation 73,044 1.05 0.74 1,424,358 1,424,358 0.65 Gibbs & Cos Inc. 69,782 1.00 0.97 1,853,142 1,853,142 0.85 Cipriani 42nd Street, LLC 69,703 1.00 1.30 2,500,000 2,500,000 1.14 Young & Rubicam, Inc. 66,936 0.96 1.21 2,314,847 2,314,847 1.06 MCI International 21,994 0.32 0.36 692,438 692,438 0.32 Capital Mercury Shirt 64,122 0.92 0.74 1,410,684 1,410,684 0.65 NYC, Board of Education 64,000 0.92 0.42 801,400 801,400 0.37 Newport News 61,327 0.88 0.89 1,698,709 1,698,709 0.78 Leslie Fay Companies, Inc. 60,999 0.88 0.92 1,757,330 1,757,330 0.80 Dow Jones & Co. Inc. 56,442 0.81 0.90 1,726,435 1,726,435 0.79 --------- ----- ----- ----------- TOTAL 2,519,036 36.20 32.58 62,513,656 WHOLLY OWNED PORTFOLIO 6,958,392 191,899,694 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- JOINT VENTURE PROPERTIES (1) The City of New York (if combined) 335,929 7,038,551 6,541,559 2.99 J&W Seligman & Co., Inc. 175,346 5,385,368 2,687,299 1.23 Visiting Nurse Service of NY 168,000 3,441,345 1,717,231 0.79 Philip Morris Management Corporation 165,811 6,018,982 3,003,472 1.37 Information Builders Inc 88,571 1,988,651 992,337 0.45 Interep National Radio Sales 66,866 2,249,202 1,122,352 0.51 MCI International ( if combined) 65,578 2,650,558 1,672,539 0.76 --------- ---------- ----- TOTAL 1,066,101 74,203,894 33.93 WHOLLY OWNED PORTFOLIO + ALLOCATED JV PROPERTIES 218,673,597 - --------------------------------------------------------------------------------------------------------------------------------
(1) Consolidates SLG's prorata interest in the Annualized Rent of all joint ventures with wholly owned Annualized Rent. The prorata tenant exposure is then calculated as a percentage of this new total. Page 23 Third Quarter - 2000 Leasing Activity Available Space
ACTIVITY TYPE BUILDING ADDRESS # OF LEASES USABLE SF ------------- ---------------- ----------- --------- VACANCY @ 6/30/00 211,633 EXPIRING SPACE OFFICE 1250 Broadway 1 2,771 292 Madison Avenue 6 61,146 1414 6th Avenue 1 908 1372 Broadway 2 7,480 110 East 42nd Street 1 1,820 17 Battery Place 1 354 1412 Broadway 1 2,396 1466 Broadway 9 6,478 420 Lexington Avenue 11 10,133 --- ------ TOTAL/WEIGHTED AVERAGE 33 93,486 MOVE OUTS OFFICE 100 Park Avenue 1 5,247 90 Broad Street 1 15,500 292 Madison Avenue 1 10,269 70 West 36th Street 2 3,046 1140 Sixth Avenue 2 10,040 1372 Broadway 1 26,729 50 West 23rd Street 1 2,724 110 East 42nd Street 2 7,370 1412 Broadway 2 2,751 321 West 44th Street 1 188 711 Third Avenue 1 6,607 440 Ninth Avenue 2 18,603 1466 Broadway 5 4,899 420 Lexington Avenue 5 9,813 -- ----- TOTAL/WEIGHTED AVERAGE 27 123,786 EVICTED TENANTS OFFICE 1412 Broadway 1 3,186 RELOCATING TENANTS OFFICE 420 Lexington Avenue 1 172 ADDT'L AVAILABLE SPACE OFFICE 62 220,630 AVAILABLE SPACE 432,263
PREV. ESCALATED ACTIVITY TYPE BUILDING ADDRESS RENTABLE SF RENT/RENTABLE SF* ($'S) ------------- ---------------- ----------- ----------------------- VACANCY @ 6/30/00 EXPIRING SPACE OFFICE 1250 Broadway 2,771 23.09 292 Madison Avenue 61,302 26.73 1414 6th Avenue 1,275 27.59 1372 Broadway 11,443 23.22 110 East 42nd Street 2,244 25.00 17 Battery Place 354 32.44 1412 Broadway 3,284 33.00 1466 Broadway 8,307 30.03 420 Lexington Avenue 11,338 27.06 ------- ----- TOTAL/WEIGHTED AVERAGE 102,318 26.74 MOVE OUTS OFFICE 100 Park Avenue 5,247 45.00 90 Broad Street 15,500 28.47 292 Madison Avenue 10,113 28.00 70 West 36th Street 3,046 24.54 1140 Sixth Avenue 10,150 39.83 1372 Broadway 34,045 24.39 50 West 23rd Street 2,724 10.00 110 East 42nd Street 9,241 23.13 1412 Broadway 3,842 37.08 321 West 44th Street 188 46.05 711 Third Avenue 8,991 30.98 440 Ninth Avenue 20,886 18.45 1466 Broadway 6,157 32.46 420 Lexington Avenue 11,803 26.11 ------- ----- TOTAL/WEIGHTED AVERAGE 141,933 27.01 EVICTED TENANTS OFFICE 1412 Broadway 4,562 19.08 RELOCATING TENANTS OFFICE 420 Lexington Avenue 223 18.03 ADDT'L AVAILABLE SPACE OFFICE 249,036 26.75 AVAILABLE SPACE
* Escalated Rent is calculated as Total Annual Income less Electric Charges. Page 24 Third Quarter - 2000 Leasing Activity Leased Space
# OF ACTIVITY TYPE BUILDING ADDRESS LEASES USABLE SF RENTABLE SF - ------------- ---------------- ------ --------- ----------- AVAILABLE SPACE 432,263 RENEWING TENANTS OFFICE 110 East 42nd Street 1 1,820 2,826 1466 Broadway 1 749 1,015 420 Lexington Avenue 1 806 986 -- ---- --- TOTAL/WEIGHTED AVERAGE 3 3,375 4,827 RELOCATING TENANTS OFFICE 420 Lexington Avenue 1 321 370 EXPANSION TENANTS OFFICE 1140 Sixth Avenue 2 10,040 11,546 420 Lexington Avenue 2 929 1,330 -- ---- ----- TOTAL/WEIGHTED AVERAGE 4 10,969 12,876 NEW TENANTS REPLACING OLD TENANTS OFFICE 100 Park Avenue 1 5,247 5,500 90 Broad Street 2 17,699 19,929 292 Madison Avenue 1 61,302 61,614 70 West 36th Street 1 1,267 1,267 1372 Broadway 2 30,751 40,549 110 East 42nd Street 2 5,498 8,304 1412 Broadway 2 2,876 3,101 711 Third Avenue 2 6,607 9,483 1466 Broadway 2 500 657 420 Lexington Avenue 10 18,846 24,108 --- ------- ------ TOTAL/WEIGHTED AVERAGE 25 150,593 174,512
RENT / PREV. ESCALATED RENT / ACTIVITY TYPE BUILDING ADDRESS RENTABLE SF* ($'S) RENTABLE SF** ($'S) - ------------- ---------------- ------------------ ---------------------- AVAILABLE SPACE RENEWING TENANTS OFFICE 110 East 42nd Street 38.00 19.85 1466 Broadway 43.00 42.00 420 Lexington Avenue 50.00 23.94 ------ ----- TOTAL/WEIGHTED AVERAGE 41.50 25.34 RELOCATING TENANTS OFFICE 420 Lexington Avenue 28.81 13.59 EXPANSION TENANTS OFFICE 1140 Sixth Avenue 42.47 35.45 420 Lexington Avenue 46.81 37.63 ------ ----- TOTAL/WEIGHTED AVERAGE 42.92 35.67 NEW TENANTS REPLACING OLD TENANTS OFFICE 100 Park Avenue 53.00 42.93 90 Broad Street 35.11 27.87 292 Madison Avenue 34.50 26.72 70 West 36th Street 37.00 28.11 1372 Broadway 35.07 20.48 110 East 42nd Street 37.49 20.57 1412 Broadway 39.43 36.27 711 Third Avenue 40.56 30.98 1466 Broadway 29.06 21.60 420 Lexington Avenue 45.99 21.26 ------ ----- TOTAL/WEIGHTED AVERAGE 37.43 25.26
FREE RENT ACTIVITY TYPE BUILDING ADDRESS T.I / SF ($'S) # OF MONTHS - ------------- ---------------- -------------- ------------ AVAILABLE SPACE RENEWING TENANTS OFFICE 110 East 42nd Street 5.00 - 1466 Broadway - - 420 Lexington Avenue - - ---- ---- TOTAL/WEIGHTED AVERAGE 2.93 - RELOCATING TENANTS OFFICE 420 Lexington Avenue - - EXPANSION TENANTS OFFICE 1140 Sixth Avenue - - 420 Lexington Avenue - 3 ---- ---- TOTAL/WEIGHTED AVERAGE - 1 NEW TENANTS REPLACING OLD TENANTS OFFICE 100 Park Avenue 15.00 2 90 Broad Street - 4 292 Madison Avenue - 1 70 West 36th Street - - 1372 Broadway - - 110 East 42nd Street 6.26 5 1412 Broadway - - 711 Third Avenue 29.55 4 1466 Broadway - 1 420 Lexington Avenue 1.49 1 ------ ---- TOTAL/WEIGHTED AVERAGE 2.58 1
Page 25 Third Quarter - 2000 Leasing Activity Leased Space
# OF ACTIVITY TYPE BUILDING ADDRESS LEASES USABLE SF RENTABLE SF - ------------- ---------------- ------ --------- ----------- NEW TENANTS REPLACING VACANCIES OFFICE 100 Park Avenue 1 1,223 1,223 1250 Broadway 1 360 360 90 Broad Street 1 782 782 1140 Sixth Avenue 1 132 150 1412 Broadway 2 6,698 8,755 321 West 44th Street 1 600 600 420 Lexington Avenue 3 10,209 10,741 -- ------- ------ TOTAL/WEIGHTED AVERAGE 10 20,004 22,611 LEASED SPACE TOTAL OFFICE 43 185,262 215,196 TOTAL AVAILABLE SPACE 9/30/00 (NET OF HOLDOVER) 247,001 HOLDOVER TENANTS 1414 6th Avenue 1 908 1,275 17 Battery Place 1 354 354 1412 Broadway 1 2,396 3,284 1466 Broadway 8 5,729 7,292 420 Lexington Avenue 5 3,462 3,866 -- ------ ----- 16 12,849 16,071 TOTAL AVAILABLE SPACE 9/30/00 (INCL. HOLDOVER) 234,152 EARLY RENEWALS OFFICE 286 Madison 1 6,850 6,850 420 Lexington Avenue 1 500 714 -- ---- --- 2 7,350 7,564
RENT / PREV. ESCALATED RENT / ACTIVITY TYPE BUILDING ADDRESS RENTABLE SF* ($'S) RENTABLE SF** ($'S) - ------------- ---------------- ------------------ --------------------- NEW TENANTS REPLACING VACANCIES OFFICE 100 Park Avenue 25.00 1250 Broadway 83.33 90 Broad Street 24.50 1140 Sixth Avenue 44.00 1412 Broadway 35.00 321 West 44th Street 23.32 420 Lexington Avenue 40.49 ----- TOTAL/WEIGHTED AVERAGE 37.22 LEASED SPACE TOTAL OFFICE 37.81 25.93 TOTAL AVAILABLE SPACE 9/30/00 (NET OF HOLDOVER) HOLDOVER TENANTS 1414 6th Avenue 27.59 27.59 17 Battery Place 32.44 32.44 1412 Broadway 33.00 33.00 1466 Broadway 34.22 34.22 420 Lexington Avenue 38.61 31.93 ------ ----- 34.46 32.85 TOTAL AVAILABLE SPACE 9/30/00 (INCL. HOLDOVER) EARLY RENEWALS OFFICE 286 Madison 25.92 19.35 420 Lexington Avenue 47.00 30.38 ------ ----- 27.91 20.39
FREE RENT ACTIVITY TYPE BUILDING ADDRESS T.I / SF ($'S) # OF MONTHS - ------------- ---------------- -------------- ----------- NEW TENANTS REPLACING VACANCIES OFFICE 100 Park Avenue - - 1250 Broadway - 2 90 Broad Street - - 1140 Sixth Avenue - - 1412 Broadway 21.26 - 321 West 44th Street - - 420 Lexington Avenue 16.76 - ------ ---- TOTAL/WEIGHTED AVERAGE 16.19 - LEASED SPACE TOTAL OFFICE 3.86 1 Total Available Space 9/30/00 (net of Holdover) HOLDOVER TENANTS 1414 6th Avenue - - 17 Battery Place - - 1412 Broadway - - 1466 Broadway - - 420 Lexington Avenue - - ------ ---- - - TOTAL AVAILABLE SPACE 9/30/00 (INCL. HOLDOVER) EARLY RENEWALS OFFICE 286 Madison - - 420 Lexington Avenue - - ------ ---- - -
* Annual Base Rent ** Escalated Rent is calculated as Total Annual Income less Electric Charges. Page 26 ANNUAL LEASE EXPIRATIONS ------------------------
Annualized Rent Annualized Rent Number of Square Footage Percentage of of Expiring of Expiring Year 2000 Weighted Year of Lease Expiring of Expiring Total Lease Leases Leases Average Asking Expiration Leases* Leases Sq. Ft. ($'s) $/psf** Rents $/psf - ------------------------------------------------------------------------------------------------------------------------------------ CONSOLIDATED PROPERTIES In 1st Quarter 2000 25 56,317 0.81 1,278,461 22.70 39.85 In 2nd Quarter 2000 7 20,661 0.30 754,407 36.51 41.22 In 3rd Quarter 2000 14 15,992 0.23 544,906 34.07 41.36 In 4th Quarter 2000 56 101,266 1.46 3,047,314 30.09 41.74 TOTAL 2000 102 194,236 2.79 5,625,088 28.96 41.11 2001 138 403,819 5.80 12,011,357 29.74 42.06 2002 127 408,688 5.87 10,905,203 26.68 41.63 2003 129 556,450 8.00 15,512,269 27.88 41.47 2004 91 517,632 7.44 14,599,025 28.20 41.91 2005 78 550,899 7.92 17,101,005 31.04 41.29 2006 39 406,457 5.84 10,633,623 26.16 40.76 2007 36 455,552 6.55 11,108,778 24.39 40.15 2008 41 618,303 8.89 17,434,963 28.20 39.97 2009 42 609,240 8.76 16,757,541 27.51 41.66 THEREAFTER 78 2,237,116 32.15 60,210,842 26.91 42.80 ------------------------------------------------------------------------------------ 901 6,958,392 100.00 191,899,694 27.58 41.70
* Tenants may have multiple leases. ** Represents in place annualized rent allocated by year of maturity. Page 27 ANNUAL LEASE EXPIRATIONS ------------------------
Annualized Rent Annualized Rent Number of Square Footage Percentage of of Expiring of Expiring Year 2000 Weighted Year of Lease Expiring of Expiring Total Lease Leases Leases Average Asking Expiration Leases* Leases Sq. Ft. ($'s) $/psf** Rents $/psf - ------------------------------------------------------------------------------------------------------------------------------------ JOINT VENTURE PROPERTIES In 1st Quarter 2000 1 250 0.01 11,612 46.45 32.50 In 2nd Quarter 2000 1 5,792 0.29 112,836 19.48 32.50 In 3rd Quarter 2000 -- -- -- -- -- -- In 4th Quarter 2000 1 490 0.02 13,494 27.54 32.50 TOTAL 2000 3 6,532 0.32 137,942 21.12 32.50 2001 11 25,921 1.28 554,947 21.41 38.19 2002 16 158,720 7.84 3,540,120 22.30 41.02 2003 16 220,500 10.89 5,208,338 23.62 42.32 2004 19 218,318 10.78 6,445,422 29.52 42.86 2005 14 132,085 6.52 3,916,874 29.65 49.42 2006 11 253,808 12.53 5,756,637 22.68 44.87 2007 7 268,431 13.25 8,617,342 32.10 51.35 2008 12 142,159 7.02 4,041,195 28.43 45.37 2009 13 327,057 16.15 10,314,834 31.54 51.43 THEREAFTER 21 272,042 13.43 8,702,243 31.99 45.30 ------------------------------------------------------------------------------------ 143 2,025,573 100.00 57,235,894 28.26 46.26
* Tenants may have multiple leases. ** Represents in place annualized rent allocated by year of maturity. Page 28 SUMMARY OF REAL ESTATE ACQUISITION ACTIVITY POST 1997
Net Rentable 1998 Acquisitions Property Type of Ownership Submarket s.f. - ----------------- -------- ----------------- --------- ------------ Mar-98 420 Lexington Operating Sublease Grand Central North 1,188,000 Mar-98 1466 Broadway Fee Interest Times Square 289,000 Mar-98 321 West 44th Fee Interest Times Square 203,000 May-98 711 3rd Avenue Operating Sublease Grand Central North 524,000 Jun-98 440 9th Avenue Fee Interest Garment 339,000 Aug-98 1412 Broadway Fee Interest Times Square South 389,000 --------- 2,932,000 1999 Acquisitions - ----------------- Jan-99 420 Lexington Leasehold Sub-leasehold Grand Central North Jan-99 555 West 57th - 65% JV Fee Interest Midtown West 941,000 May-99 90 Broad Street - 35% JV Fee Interest Financial 339,000 May-99 THE MADISON PROPERTIES: Fee Interest Grand Central South 286 Madison Avenue 112,000 290 Madison Avenue 36,800 292 Madison Avenue 187,000 Aug-99 1250 Broadway - 50% JV Fee Interest Penn Station 670,000 Nov-99 555 West 57th - remaining 35% Fee Interest Midtown West - --------- 2,285,800 2000 Acquisitions - ----------------- Feb-00 100 Park Avenue Fee Interest Grand Central South 834,000 Contribution to JV - ------------------ May-00 321 West 44th Fee Interest Times Square 203,000 Announced in 2000 - ----------------- Target - 4Q00 180 Madison Avenue Fee Interest 265,000 Target - 4Q00 1370 Broadway Fee Interest Garment 255,000 Target - 1Q01 1 Park Avenue Various Interests Grand Central South 913,000 % Leased % Leased Acquisition 1998 Acquisitions at acquisition 9/30/2000 Price ($'s) - ----------------- -------------- ---------- ----------- Mar-98 83 99 78,000,000 Mar-98 87 92 64,000,000 Mar-98 96 98 17,000,000 May-98 79 100 65,600,000 (1) Jun-98 76 94 32,000,000 Aug-98 90 98 82,000,000 ----------- 338,600,000 1999 Acquisitions - ----------------- Jan-99 27,300,000 Jan-99 100 100 66,700,000 (2) May-99 82 99 34,500,000 May-99 50,000,000 99 99 86 100 97 95 Aug-99 97 99 93,000,000 Nov-99 34,100,000 ----------- 305,600,000 2000 Acquisitions - ----------------- Feb-00 97 99 192,000,000 Contribution to JV - ------------------ May-00 98 98 28,400,000 Announced in 2000 - ----------------- Target - 4Q00 87 41,250,000 Target - 4Q00 97 50,500,000 Target - 1Q01 97 233,900,000
(1) This includes the issuance of 44,772 OP units (valued at $1mm) and $20mm for a 50% interest in the Building Fee (purchased 7/98). (2) This includes the assumption of mortgage debt for $28.6mm (65% of $44mm). Page 29 EX-99.2 3 a2028535zex-99_2.txt EXHIBIT 99.2 EXHIBIT 99.2 [LETTERHEAD OF SL GREEN REALTY CORP.] CONTACT David Nettina President & Chief Operating Officer - -or- Thomas E. Wirth Chief Financial Officer (212) 594-2700 FOR IMMEDIATE RELEASE SL GREEN REALTY CORP. REPORTS 21% GAIN IN THIRD QUARTER FFO THIRD QUARTER HIGHLIGHTS o 21% FFO increase, $0.70 per share (diluted) versus $0.58 prior year o 14% same store portfolio cash NOI growth o Announced sales of 17 Battery South and 90 Broad Street o Announced the purchases of One Park Avenue, 1370 Broadway, and 180 Madison Avenue o Refinanced 420 Lexington Avenue; generating $70 million in net liquidity FINANCIAL RESULTS NEW YORK, NY, OCTOBER 25, 2000 - SL Green Realty Corp. (NYSE:SLG) reported a 21% increase in operating results for the three months ended September 30, 2000. During this period funds from operations (FFO) before minority interest totaled $20.1 million, or $0.70 per share (diluted), compared to $15.9 million, or $0.58 per share for the same quarter in 1999. Total revenues increased 11% in the third quarter to $60.9 million compared to $54.7 million last year. The $6.2 million growth in revenue resulted from: o 2000 same store portfolio ($5.5 million) o Investment income ($3.4 million) o 1999 acquisitions ($1.0 million) These revenue increases were partially offset by reduced revenues of properties sold ($1.8 million) or contributed to unconsolidated joint ventures ($1.9 million). 1 During the quarter, the Company received $8.7 million and, after transaction costs and deferred compensation awards, recorded a gain of $5.6 million, resulting from the early redemption of a preferred equity investment in 1370 Avenue of Americas and sale of the property. The gain on the redemption is not reflected in the Company's FFO results, as it is excluded from the definition of FFO. In connection with this transaction, the Company received $0.7 million in accelerated investment income that is included in the Company's FFO results. Same store cash NOI increased $2.9 million, or 14%, to $23.5 million over the same period in the prior year. Cash NOI margins before ground rent improved year over year from 54.9% to 55.6%. The improvement in cash NOI was driven primarily by a $4.8 million increase in cash revenue due to: o A 30% increase in replacement rents over previously fully-escalated rents ($1.7 million) o Reduced free rent as many properties reached stabilization ($0.3 million) o Increased occupancy from 95% to 98% ($1.0 million) o Rent steps from current in-place tenants ($0.5 million) o $1.5 million increase in escalation and reimbursement income primarily from increased electric recoveries ($1.1 million) The increase in revenue was partially offset by a $2.0 million or 20% increase in operating costs, over half of which was related to higher utility costs ($1.2 million) and the remainder from increased payroll and cleaning costs ($0.6 million). The increased payroll and cleaning costs relate to increased overtime payroll ($0.2 million) charged back to tenants, lower prior year costs related to benefit refunds ($0.2 million), and 5% higher labor costs ($0.2 million). Approximately 75% of the electric increase was recovered from tenants under the utility clause of their lease. In addition, real estate taxes increased due to higher assessed values at several properties ($0.2 million). The Company's EBITDA increased $6.2 million, resulting in increased margins before ground rent of 65.4% compared to 57.7% for the same period last year and after ground rent margin improvement of 59.7% from 51.6% in the corresponding period. Margin improvement was driven by each of the Company's real estate investment themes: o GAAP NOI of $2.9 million; - $2.8 million increase from same store portfolio (12% improvement) - $1.7 million increase from 1999 acquisitions - $0.4 million increase from joint ventures - $2.0 decrease from properties sold or contributed to a joint venture o Income from structured finance, $3.5 million, and other $0.1 million o Reduced MG&A, $0.4 million primarily due to increased allocation of costs to the service corporation and joint ventures These increases in EBITDA were offset by ($0.7 million) from minority interest in joint ventures. 2 FFO improved $4.2 million as a result of: o $6.2 million increase in EBITDA o $0.7 million increase in income from unconsolidated joint ventures, and o $0.4 million from the acquisition of the minority interest in the BMW building. These improvements were offset in part by higher interest costs ($2.9 million) associated with: higher average debt levels due to acquisition and new investment debt ($1.6 million), the higher average debt levels due to the funding of ongoing capital projects and working capital requirements ($0.5 million), and higher interest rates from floating rate debt ($0.8 million). At the end of the quarter, consolidated debt totaled $472.1 million, reflecting a debt to market capitalization ratio of 35.2%. NEW INVESTMENTS TO DATE On September 21, 2000, the Company entered into an agreement to purchase 1370 Broadway for $50.4 million. This 16-story, 255,000 square foot office building is located in the heart of Times Square, directly across the street from 1372 Broadway, another SL Green building. In-place rents are approximately $27.72, approximately 38% below current market levels. The acquisition will be funded through the Company's unsecured line of credit. This transaction is scheduled to close in January 2001. On September 22, 2000, the Company, via a joint venture with Morgan Stanley Real Estate Fund III ("MSREF"), entered into an agreement to purchase 180 Madison Avenue for $41.25 million. The property consists of 265,000 square feet over 23 floors. It is located at the corner of 34th Street and Madison Avenue. SL Green will purchase a 49.9% interest in the property. The Company intends to use the acquisition to effect a Section 1031 tax-free exchange in order to partially defer the capital gain resulting from the sale of 90 Broad Street. SL Green will assume managing and leasing responsibilities for the property. This transaction is scheduled to close in December 2000. On September 28, 2000, the Company entered into an agreement to purchase various ownership and mortgage interests in One Park Avenue for $233.9 million. This 913,000 square foot, 20-story office building is located between 32nd and 33rd Streets with full block prominence on Park Avenue. The Company also acquired an option to purchase the ground lease position. The acquisition will be financed with a mortgage loan from Lehman Brothers Holdings, Inc. and the Company's unsecured line of credit. This transaction is scheduled to close in January 2001. The Company announced that it has entered into contracts for the sale of two downtown properties: The first is located at 90 Broad Street. This property is owned through a joint venture partnership with MSREF, and the Company owns a 35% interest in this partnership. The 3 property is approximately 339,000 square feet with a contracted sales price of $60 million, or $177 per square foot. The sale is scheduled to close in November 2000. The second is a wholly-owned property located at 17 Battery Place South. This property is approximately 400,000 square feet with a contracted sales price of $53 million or $132 per square foot. The sale is expected to occur in December 2000. At September 30, 2000, SL Green's portfolio consisted of interests in 23 properties, aggregating 9.1 million square feet. Since September 30, 1999, the portfolio has grown by a net 0.6 million square feet, or 7%. SL Green Realty is a self-administered and self-managed real estate investment trust ("REIT") that acquires, owns and manages a Class B Manhattan office portfolio. The Company is the only publicly held REIT which exclusively specializes in this niche. Financial Tables attached To receive SL Green's latest news release and other corporate documents, including the Third Quarter Supplemental Data, via FAX at no cost, please contact the Investor Relations office at 212-216-1601. All releases and supplemental data can also be downloaded directly from the SL Green website at: WWW.SLGREEN.COM. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING INFORMATION BASED UPON THE COMPANY'S CURRENT BEST JUDGMENT AND EXPECTATIONS. ACTUAL RESULTS COULD VARY FROM THOSE PRESENTED HEREIN. THE RISKS AND UNCERTAINTIES ASSOCIATED WITH FORWARD-LOOKING INFORMATION IN THIS RELEASE INCLUDE THE STRENGTH OF THE COMMERCIAL OFFICE AND INDUSTRIAL REAL ESTATE MARKETS IN NEW YORK, COMPETITIVE MARKET CONDITIONS, UNANTICIPATED ADMINISTRATIVE COSTS, TIMING OF LEASING INCOME, GENERAL AND LOCAL ECONOMIC GROWTH, INTEREST RATES AND CAPITAL MARKET CONDITIONS. FOR FURTHER INFORMATION, PLEASE REFER TO THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. 4 SL GREEN REALTY CORP. STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended Sept 30 Sept 30 2000 1999 2000 1999 --------------------- ----------------------- (unaudited) (unaudited) REVENUE: Rental revenue, net $ 47,647 $ 45,080 $ 140,998 $ 129,267 Escalations & reimbursement revenues 7,593 6,856 18,941 16,473 Signage Rent 496 559 1,593 1,112 Investment income 4,968 1,469 9,903 3,731 Other income 170 688 693 1,545 --------- --------- --------- --------- Total revenues 60,874 54,652 172,128 152,128 --------- --------- --------- --------- EXPENSES: Operating expenses 15,260 14,293 41,893 36,778 Ground rent 3,164 3,183 9,505 9,572 Interest 10,698 7,772 30,243 19,722 Depreciation and amortization 8,300 7,677 24,519 19,705 Real estate taxes 7,299 7,481 21,688 21,904 Marketing, general and administrative 2,540 2,979 8,517 8,387 --------- --------- --------- --------- Total expenses 47,261 43,385 136,365 116,068 --------- --------- --------- --------- Income before minority interests, preferred stock dividends, gain on sales, extraordinary item, service corporation and joint venture income 13,613 11,267 35,763 36,060 Equity in net income from affiliates 71 223 609 551 Equity in net income from unconsolidated joint ventures 586 151 2,209 151 Minority interests (1,496) (1,169) (4,964) (4,262) Extraordinary losses -- -- (430) (628) Gain on sale of rental properties/investments 5,624 -- 24,646 -- Preferred stock dividends and accretion (2,407) (2,399) (7,220) (7,198) --------- --------- --------- --------- Net income available to common shareholders $ 15,991 $ 8,073 $ 50,613 $ 24,674 ========= ========= ========= ========= Basic earnings per share $ 0.65 $ 0.33 $ 2.08 $ 1.02 Diluted earnings per share $ 0.64 $ 0.33 $ 2.05 $ 1.02 FUNDS FROM OPERATIONS (FFO) FFO per share (Basic) $ 0.74 $ 0.60 $ 2.05 $ 1.72 FFO per share (Diluted) $ 0.70 $ 0.58 $ 1.97 $ 1.68 FFO CALCULATION: Income before minority interests, extraordinary items, preferred stock dividends and gains on sales $ 14,270 11,641 $ 38,581 $ 36,762 LESS: Preferred stock dividend (2,300) (2,300) (6,900) (6,900) Minority interest in commercial property -- (354) -- (1,765) ADD: Joint venture FFO adjustment 842 120 2,468 120 Depreciation and amortization 8,300 7,677 24,519 19,705 Amortization of deferred financing costs and depreciation of non-real estate assets (1,042) (878) (3,105) (2,140) --------- --------- --------- --------- FFO - BASIC 20,070 15,906 55,563 45,782 Add: Preferred stock dividends 2,300 2,300 6,900 6,900 --------- --------- --------- --------- FFO - DILUTED $ 22,370 $ 18,206 $ 62,463 $ 52,682 ========= ========= ========= ========= Basic ownership interests Weighted average REIT common shares 24,458 24,200 24,329 24,195 Weighted average partnership units held by minority interest 2,346 2,428 2,385 2,428 --------- --------- --------- --------- Basic weighted average shares and units outstanding 26,804 26,628 26,714 26,623 ========= ========= ========= ========= Diluted ownership interest Weighted average REIT common and common share equivalent share 24,954 24,278 24,678 24,258 Weighted average partnership units held by minority interests 2,346 2,428 2,385 2,428 Common share equivalents for preferred stock 4,699 4,699 4,699 4,699 --------- --------- --------- --------- Diluted weighted average equivalent shares and units outstanding 31,999 31,405 31,762 31,385 ========= ========= ========= =========
5 SL GREEN REALTY CORP CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
Sept 30, December 31, 2000 1999 ------------ ----------- (unaudited) ASSETS Commercial real estate properties, at cost: Land and land interests ................................................................ $ 125,572 $ 132,081 Buildings and improvements ............................................................. 609,089 632,004 Building leasehold ..................................................................... 137,441 132,573 Property under capital lease ........................................................... 12,208 12,208 ----------- ----------- 884,310 908,866 Less accumulated depreciation .......................................................... (72,179) (56,983) ----------- ----------- 812,131 851,883 Properties held for sale ............................................................... 49,890 25,835 Cash and cash equivalents .............................................................. 14,064 21,561 Restricted cash ........................................................................ 34,583 34,168 Tenant and other receivables, net $1,930 and $938 reserve in 2000 and 1999, respectively ........................................................................ 9,132 5,747 Related party receivables .............................................................. 964 463 Deferred rents receivable net of provision for doubtful accounts of $5,002 and $5,337 in 2000 and 1999, respectively .................................... 43,452 37,015 Investment in and advances to affiliates ............................................... 7,943 4,978 Investment in unconsolidated joint ventures ............................................ 59,632 23,441 Mortgage loans and preferred investments ............................................... 49,903 20,000 Deferred costs, net .................................................................... 37,924 30,540 Other assets ........................................................................... 34,100 15,611 ----------- ----------- Total assets ........................................................................... $ 1,153,718 $ 1,071,242 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable ................................................................. $ 345,351 $ 352,693 Revolving credit facility .............................................................. 126,752 83,000 Accrued interest payable ............................................................... 3,069 2,650 Accounts payable and accrued expenses .................................................. 28,045 17,167 Deferred revenue ....................................................................... 1,444 306 Capitalized lease obligations .......................................................... 15,242 15,017 Deferred land lease payable ............................................................ 12,805 11,611 Dividend and distributions payable ..................................................... 12,065 11,947 Security deposits ...................................................................... 18,951 18,905 ----------- ----------- Total liabilities ...................................................................... 563,724 513,296 ----------- ----------- Minority interests ..................................................................... 41,753 41,494 8% Preferred Income Equity Redeemable Stock $0.01 par value, $25.00 mandatory liquidation preference 25 million shares authorized, 4.6 million outstanding in 2000 and 1999 ................................ 110,667 110,348 STOCKHOLDERS' EQUITY Common stock, $.01 par value 100,000 shares authorized, 24,516 and 24,184 issued and outstanding in 2000 and 1999, respectively ................................. 245 242 Additional paid-in capital .................................................... 428,635 421,958 Deferred compensation plan .................................................... (5,939) (6,674) Distributions in excess of earnings ........................................... 14,633 (9,422) ----------- ----------- Total stockholders' equity ............................................................. 437,574 406,104 ----------- ----------- Total liabilities and stockholders' equity ............................................. $ 1,153,718 $ 1,071,242 =========== ===========
6 SL GREEN REALTY CORP. SELECTED OPERATING DATA--UNAUDITED
SEPTEMBER 30, 2000 DECEMBER 31, 1999 ------------------ ----------------- OPERATING DATA: Net rentable area at end of period (in 000's)(1) 9,130 8,540 Portfolio occupancy percentage at end of period 98% 97% Same Store occupancy percentage at end of period 98% 97% Number of properties in operation 23 24 (1) Includes wholly-owned and minority owned properties.
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