SL Green Realty Corp. | ||
SL Green Operating Partnership, L.P. | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
x | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | |||
Smaller Reporting Company | Emerging Growth Company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | x | |||
Smaller Reporting Company | Emerging Growth Company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Registrant | Trading Symbol | Title of Each Class | Name of Each Exchange on Which Registered | |||
SL Green Realty Corp. | ||||||
SL Green Realty Corp. |
• | Combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | Combined reports eliminate duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company's disclosure applies to both the Company and the Operating Partnership; and |
• | Combined reports create time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | consolidated financial statements; |
• | the following notes to the consolidated financial statements: |
◦ | Note 11, Noncontrolling Interests on the Company’s Consolidated Financial Statements; |
◦ | Note 12, Stockholders' Equity of the Company; |
◦ | Note 13, Partners' Capital of the Operating Partnership. |
PART I. FINANCIAL INFORMATION | ||
Item 1. | FINANCIAL STATEMENTS | |
FINANCIAL STATEMENTS OF SL GREEN REALTY CORP. | ||
Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 | ||
Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited) | ||
FINANCIAL STATEMENTS OF SL GREEN OPERATING PARTNERSHIP, L.P. | ||
Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 | ||
Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Capital for the three and nine months ended September 30, 2019 and 2018 (unaudited) | ||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited) | ||
Notes to Consolidated Financial Statements (unaudited) | ||
Management's Discussion and Analysis of Financial Condition and Results of Operations | ||
Quantitative and Qualitative Disclosures about Market Risk | ||
Controls and Procedures (SL Green Realty Corp. and SL Green Operating Partnership, L.P.) | ||
PART II. | OTHER INFORMATION | |
Legal Proceedings | ||
Risk Factors | ||
Unregistered Sales of Equity Securities and Use of Proceeds | ||
Defaults Upon Senior Securities | ||
Mine Safety Disclosures | ||
Other Information | ||
Exhibits | ||
Signatures |
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
Assets | |||||||
Commercial real estate properties, at cost: | |||||||
Land and land interests | $ | $ | |||||
Building and improvements | |||||||
Building leasehold and improvements | |||||||
Right of use asset - financing leases | |||||||
Right of use asset - operating leases | |||||||
Less: accumulated depreciation | ( | ) | ( | ) | |||
Assets held for sale | |||||||
Cash and cash equivalents | |||||||
Restricted cash | |||||||
Investments in marketable securities | |||||||
Tenant and other receivables | |||||||
Related party receivables | |||||||
Deferred rents receivable | |||||||
Debt and preferred equity investments, net of discounts and deferred origination fees of $16,224 and $22,379 in 2019 and 2018, respectively, and allowances of $1,750 and $5,750 in 2019 and 2018, respectively. | |||||||
Investments in unconsolidated joint ventures | |||||||
Deferred costs, net | |||||||
Other assets | |||||||
Total assets (1) | $ | $ | |||||
Liabilities | |||||||
Mortgages and other loans payable, net | $ | $ | |||||
Revolving credit facility, net | |||||||
Unsecured term loans, net | |||||||
Unsecured notes, net | |||||||
Accrued interest payable | |||||||
Other liabilities | |||||||
Accounts payable and accrued expenses | |||||||
Deferred revenue | |||||||
Lease liability - financing leases | |||||||
Lease liability - operating leases | |||||||
Dividend and distributions payable | |||||||
Security deposits | |||||||
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities | |||||||
Total liabilities (1) |
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
Commitments and contingencies | — | — | |||||
Noncontrolling interests in Operating Partnership | |||||||
Preferred units | |||||||
Equity | |||||||
SL Green stockholders' equity: | |||||||
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both September 30, 2019 and December 31, 2018 | |||||||
Common stock, $0.01 par value, 160,000 shares authorized and 82,570 and 84,739 issued and outstanding at September 30, 2019 and December 31, 2018, respectively (including 1,055 shares held in treasury at September 30, 2019 and December 31, 2018) | |||||||
Additional paid-in-capital | |||||||
Treasury stock at cost | ( | ) | ( | ) | |||
Accumulated other comprehensive (loss) income | ( | ) | |||||
Retained earnings | |||||||
Total SL Green stockholders' equity | |||||||
Noncontrolling interests in other partnerships | |||||||
Total equity | |||||||
Total liabilities and equity | $ | $ | |||||
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $219.4 million and $110.0 million of land, $522.9 million and $346.7 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $61.7 million and $47.4 million of right of use assets, $27.6 million and $42.2 million of accumulated depreciation, $99.4 million and $112.6 million of other assets included in other line items, $473.2 million and $140.8 million of real estate debt, net, $1.4 million and $0.4 million of accrued interest payable, $57.4 million and $43.6 million of lease liabilities, and $35.7 million and $18.3 million of other liabilities included in other line items as of September 30, 2019 and December 31, 2018, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues | ||||||||||||||||
Rental revenue, net | $ | $ | $ | $ | ||||||||||||
Investment income | ||||||||||||||||
Other income | ||||||||||||||||
Total revenues | ||||||||||||||||
Expenses | ||||||||||||||||
Operating expenses, including related party expenses of $5,460 and $13,575 in 2019 and $4,790 and $13,289 in 2018 | ||||||||||||||||
Real estate taxes | ||||||||||||||||
Operating lease rent | ||||||||||||||||
Interest expense, net of interest income | ||||||||||||||||
Amortization of deferred financing costs | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Loan loss and other investment reserves, net of recoveries | ||||||||||||||||
Transaction related costs | ||||||||||||||||
Marketing, general and administrative | ||||||||||||||||
Total expenses | ||||||||||||||||
Equity in net (loss) income from unconsolidated joint ventures | ( | ) | ( | ) | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | ||||||||||||||||
Purchase price and other fair value adjustments | ( | ) | ||||||||||||||
Gain (loss) on sale of real estate, net | ( | ) | ||||||||||||||
Depreciable real estate reserves and impairment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Loss on early extinguishment of debt | ( | ) | ( | ) | ||||||||||||
Net income | ||||||||||||||||
Net (income) loss attributable to noncontrolling interests: | ||||||||||||||||
Noncontrolling interests in the Operating Partnership | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Noncontrolling interests in other partnerships | ( | ) | ||||||||||||||
Preferred units distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net income attributable to SL Green | ||||||||||||||||
Perpetual preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net income attributable to SL Green common stockholders | $ | $ | $ | $ | ||||||||||||
Basic Earnings per Share | $ | $ | $ | $ | ||||||||||||
Diluted Earnings per Share | $ | $ | $ | $ | ||||||||||||
Basic weighted average common shares outstanding | ||||||||||||||||
Diluted weighted average common shares and common share equivalents outstanding |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||
(Decrease) increase in unrealized value of derivative instruments, including SL Green's share of joint venture derivative instruments | ( | ) | ( | ) | ||||||||||||
Increase (decrease) in unrealized value of marketable securities | ( | ) | ( | ) | ||||||||||||
Other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
Comprehensive income | ||||||||||||||||
Net income attributable to noncontrolling interests and preferred units distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other comprehensive loss (income) attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||
Comprehensive income attributable to SL Green | $ | $ | $ | $ |
SL Green Realty Corp. Stockholders | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Series I Preferred Stock | Shares | Par Value | Additional Paid- In-Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests | Total | |||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||||||||||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Preferred dividends | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||||||||||||||
Conversion of units in the Operating Partnership for common stock | |||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest in the Operating Partnership | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | ( | ) | |||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Contributions to consolidated joint venture interests | |||||||||||||||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions declared ($1.70 per common share, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||||||||||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Preferred dividends | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||||||||||||||
Conversion of units in the Operating Partnership for common stock | |||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest in the Operating Partnership | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Contributions to consolidated joint venture interests | |||||||||||||||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions declared ($0.85 per common share, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
SL Green Realty Corp. Stockholders | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Series I Preferred Stock | Shares | Par Value | Additional Paid- In-Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interests | Total | |||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||||
Cumulative adjustment upon adoption of ASC 610-20 | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Preferred dividends | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||||||||||||||
Conversion of units in the Operating Partnership for common stock | |||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest in the Operating Partnership | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | ( | ) | |||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Proceeds from stock options exercised | |||||||||||||||||||||||||||||||||||
Contributions to consolidated joint venture interests | |||||||||||||||||||||||||||||||||||
Deconsolidation of partially owned entity | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions declared ($1.625 per common share, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Preferred dividends | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||||||||||||||
Conversion of units in the Operating Partnership for common stock | |||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest in the Operating Partnership | |||||||||||||||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Proceeds from stock options exercised | |||||||||||||||||||||||||||||||||||
Contributions to consolidated joint venture interests | |||||||||||||||||||||||||||||||||||
Deconsolidation of partially owned entity | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Cash distributions declared ($0.8125 per common share, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Operating Activities | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Equity in net loss (income) from unconsolidated joint ventures | ( | ) | |||||
Distributions of cumulative earnings from unconsolidated joint ventures | |||||||
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate | ( | ) | ( | ) | |||
Purchase price and other fair value adjustments | ( | ) | ( | ) | |||
Depreciable real estate reserves and impairment | |||||||
Gain on sale of real estate, net | ( | ) | ( | ) | |||
Loan loss reserves and other investment reserves, net of recoveries | |||||||
Loss on early extinguishment of debt | |||||||
Deferred rents receivable | ( | ) | ( | ) | |||
Other non-cash adjustments | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables | ( | ) | |||||
Related party receivables | |||||||
Deferred lease costs | ( | ) | ( | ) | |||
Other assets | ( | ) | ( | ) | |||
Accounts payable, accrued expenses, other liabilities and security deposits | |||||||
Deferred revenue and land leases payable | |||||||
Net cash provided by operating activities | |||||||
Investing Activities | |||||||
Acquisitions of real estate property | ( | ) | ( | ) | |||
Additions to land, buildings and improvements | ( | ) | ( | ) | |||
Acquisition deposits and deferred purchase price | ( | ) | |||||
Investments in unconsolidated joint ventures | ( | ) | ( | ) | |||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | |||||||
Net proceeds from disposition of real estate/joint venture interest | |||||||
Other investments | ( | ) | |||||
Origination of debt and preferred equity investments | ( | ) | ( | ) | |||
Repayments or redemption of debt and preferred equity investments | |||||||
Net cash (used in) provided by investing activities | ( | ) |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Financing Activities | |||||||
Proceeds from mortgages and other loans payable | $ | $ | |||||
Repayments of mortgages and other loans payable | ( | ) | ( | ) | |||
Proceeds from revolving credit facility and senior unsecured notes | |||||||
Repayments of revolving credit facility and senior unsecured notes | ( | ) | ( | ) | |||
Proceeds from stock options exercised and DRSPP issuance | |||||||
Repurchase of common stock | ( | ) | ( | ) | |||
Redemption of preferred units | ( | ) | ( | ) | |||
Redemption of OP units | ( | ) | |||||
Distributions to noncontrolling interests in other partnerships | ( | ) | ( | ) | |||
Contributions from noncontrolling interests in other partnerships | |||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | |||||
Distributions to noncontrolling interests in the Operating Partnership | ( | ) | ( | ) | |||
Dividends paid on common and preferred stock | ( | ) | ( | ) | |||
Other obligations related to loan participations | |||||||
Tax withholdings related to restricted share awards | ( | ) | ( | ) | |||
Deferred loan costs and capitalized lease obligation | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Net (decrease) increase in cash, cash equivalents, and restricted cash | ( | ) | |||||
Cash, cash equivalents, and restricted cash at beginning of year | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||||||
Conversion of units in the Operating Partnership for common stock | $ | $ | |||||
Redemption of units in the Operating Partnership for the sale of a joint venture | |||||||
Issuance of preferred units relating to a real estate acquisition | |||||||
Tenant improvements and capital expenditures payable | |||||||
Fair value adjustment to noncontrolling interest in Operating Partnership | |||||||
Deconsolidation of subsidiaries | |||||||
Transfer of assets related to assets held for sale | |||||||
Transfer of liabilities related to assets held for sale | |||||||
Removal of fully depreciated commercial real estate properties | |||||||
Contribution to consolidated joint venture by noncontrolling interest | |||||||
Share repurchase payable | |||||||
Recognition of right of use assets and related lease liabilities |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
Assets | |||||||
Commercial real estate properties, at cost: | |||||||
Land and land interests | $ | $ | |||||
Building and improvements | |||||||
Building leasehold and improvements | |||||||
Right of use asset - financing leases | |||||||
Right of use asset - operating leases | |||||||
Less: accumulated depreciation | ( | ) | ( | ) | |||
Assets held for sale | |||||||
Cash and cash equivalents | |||||||
Restricted cash | |||||||
Investments in marketable securities | |||||||
Tenant and other receivables | |||||||
Related party receivables | |||||||
Deferred rents receivable | |||||||
Debt and preferred equity investments, net of discounts and deferred origination fees of $16,224 and $22,379 in 2019 and 2018, respectively, and allowances of $1,750 and $5,750 in 2019 and 2018, respectively. | |||||||
Investments in unconsolidated joint ventures | |||||||
Deferred costs, net | |||||||
Other assets | |||||||
Total assets (1) | $ | $ | |||||
Liabilities | |||||||
Mortgages and other loans payable, net | $ | $ | |||||
Revolving credit facility, net | |||||||
Unsecured term loans, net | |||||||
Unsecured notes, net | |||||||
Accrued interest payable | |||||||
Other liabilities | |||||||
Accounts payable and accrued expenses | |||||||
Deferred revenue | |||||||
Lease liability - financing leases | |||||||
Lease liability - operating leases | |||||||
Dividend and distributions payable | |||||||
Security deposits | |||||||
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities | |||||||
Total liabilities (1) | |||||||
Commitments and contingencies | — | — | |||||
Limited partner interests in SLGOP (4,258 and 4,131 limited partner common units outstanding at September 30, 2019 and December 31, 2018, respectively) | |||||||
Preferred units |
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
Capital | |||||||
SLGOP partners' capital: | |||||||
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both September 30, 2019 and December 31, 2018 | |||||||
SL Green partners' capital (858 and 878 general partner common units and 80,657 and 82,806 limited partner common units outstanding at September 30, 2019 and December 31, 2018, respectively) | |||||||
Accumulated other comprehensive (loss) income | ( | ) | |||||
Total SLGOP partners' capital | |||||||
Noncontrolling interests in other partnerships | |||||||
Total capital | |||||||
Total liabilities and capital | $ | $ | |||||
(1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $219.4 million and $110.0 million of land, $522.9 million and $346.7 million of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $61.7 million and $47.4 million of right of use assets, $27.6 million and $42.2 million of accumulated depreciation, $99.4 million and $112.6 million of other assets included in other line items, $473.2 million and $140.8 million of real estate debt, net, $1.4 million and $0.4 million of accrued interest payable, $57.4 million and $43.6 million of lease liabilities, and $35.7 million and $18.3 million of other liabilities included in other line items as of September 30, 2019 and December 31, 2018, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues | ||||||||||||||||
Rental revenue, net | $ | $ | $ | $ | ||||||||||||
Investment income | ||||||||||||||||
Other income | ||||||||||||||||
Total revenues | ||||||||||||||||
Expenses | ||||||||||||||||
Operating expenses, including related party expenses of $5,460 and $13,575 in 2019 and $4,790 and $13,289 in 2018 | ||||||||||||||||
Real estate taxes | ||||||||||||||||
Operating lease rent | ||||||||||||||||
Interest expense, net of interest income | ||||||||||||||||
Amortization of deferred financing costs | ||||||||||||||||
Depreciation and amortization | ||||||||||||||||
Loan loss and other investment reserves, net of recoveries | ||||||||||||||||
Transaction related costs | ||||||||||||||||
Marketing, general and administrative | ||||||||||||||||
Total expenses | ||||||||||||||||
Equity in net (loss) income from unconsolidated joint ventures | ( | ) | ( | ) | ||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | ||||||||||||||||
Purchase price and other fair value adjustments | ( | ) | ||||||||||||||
Gain (loss) on sale of real estate, net | ( | ) | ||||||||||||||
Depreciable real estate reserves and impairment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Loss on early extinguishment of debt | ( | ) | ( | ) | ||||||||||||
Net income | ||||||||||||||||
Net loss (income) attributable to noncontrolling interests: | ||||||||||||||||
Noncontrolling interests in other partnerships | ( | ) | ||||||||||||||
Preferred units distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net income attributable to SLGOP | ||||||||||||||||
Perpetual preferred unit distributions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net income attributable to SLGOP common unitholders | $ | $ | $ | $ | ||||||||||||
Basic Earnings per Unit | $ | $ | $ | $ | ||||||||||||
Diluted Earnings per Unit | $ | $ | $ | $ | ||||||||||||
Basic weighted average common units outstanding | ||||||||||||||||
Diluted weighted average common units and common unit equivalents outstanding |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||
(Decrease) increase in unrealized value of derivative instruments, including SL Green's share of joint venture derivative instruments | ( | ) | ( | ) | ||||||||||||
Increase (decrease) in unrealized value of marketable securities | ( | ) | ( | ) | ||||||||||||
Other comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
Comprehensive income | ||||||||||||||||
Net loss (income) attributable to noncontrolling interests | ( | ) | ||||||||||||||
Other comprehensive loss (income) attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||
Comprehensive income attributable to SLGOP | $ | $ | $ | $ |
SL Green Operating Partnership Unitholders | |||||||||||||||||||||||
Partners' Interest | |||||||||||||||||||||||
Series I Preferred Units | Common Units | Common Unitholders | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | ||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | ||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||
Preferred distributions | ( | ) | ( | ) | |||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||
Conversion of common units | |||||||||||||||||||||||
Reallocation of noncontrolling interests in the operating partnership | ( | ) | ( | ) | |||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | ( | ) | |||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Contribution to consolidated joint venture interests | |||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||
Cash distributions declared ($1.70 per common unit, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||
Preferred distributions | ( | ) | ( | ) | |||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||
Conversion of common units | |||||||||||||||||||||||
Reallocation of noncontrolling interests in the operating partnership | ( | ) | ( | ) | |||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | |||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Contribution to consolidated joint venture interests | |||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||
Cash distributions declared ($0.85 per common unit, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | ) | $ | $ |
SL Green Operating Partnership Unitholders | |||||||||||||||||||||||
Partners' Interest | |||||||||||||||||||||||
Series I Preferred Units | Common Units | Common Unitholders | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | ||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | $ | ||||||||||||||||||
Cumulative adjustment upon adoption of ASC 610-20 | |||||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | $ | ||||||||||||||||||
Net income | |||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Preferred distributions | ( | ) | ( | ) | |||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||
Conversion of common units | |||||||||||||||||||||||
Reallocation of noncontrolling interests in the operating partnership | ( | ) | ( | ) | |||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | ( | ) | |||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Contribution to consolidated joint venture interests | |||||||||||||||||||||||
Deconsolidation of partially owned entity | ( | ) | ( | ) | |||||||||||||||||||
Contributions - proceeds from stock options exercised | |||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||
Cash distributions declared ($1.625 per common unit, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | ||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Preferred distributions | ( | ) | ( | ) | |||||||||||||||||||
DRSPP proceeds | |||||||||||||||||||||||
Conversion of common units | |||||||||||||||||||||||
Reallocation of noncontrolling interests in the operating partnership | |||||||||||||||||||||||
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings | |||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Contribution to consolidated joint venture interests | |||||||||||||||||||||||
Deconsolidation of partially owned entity | ( | ) | ( | ) | |||||||||||||||||||
Contributions - proceeds from stock options exercised | |||||||||||||||||||||||
Cash distributions to noncontrolling interests | ( | ) | ( | ) | |||||||||||||||||||
Cash distributions declared ($0.8125 per common unit, none of which represented a return of capital for federal income tax purposes) | ( | ) | ( | ) | |||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Operating Activities | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Equity in net loss (income) from unconsolidated joint ventures | ( | ) | |||||
Distributions of cumulative earnings from unconsolidated joint ventures | |||||||
Equity in net gain on sale of interest in unconsolidated joint venture interest/real estate | ( | ) | ( | ) | |||
Purchase price and other fair value adjustments | ( | ) | ( | ) | |||
Depreciable real estate reserves and impairment | |||||||
Gain on sale of real estate, net | ( | ) | ( | ) | |||
Loan loss reserves and other investment reserves, net of recoveries | |||||||
Loss on early extinguishment of debt | |||||||
Deferred rents receivable | ( | ) | ( | ) | |||
Other non-cash adjustments | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Tenant and other receivables | ( | ) | |||||
Related party receivables | |||||||
Deferred lease costs | ( | ) | ( | ) | |||
Other assets | ( | ) | ( | ) | |||
Accounts payable, accrued expenses, other liabilities and security deposits | |||||||
Deferred revenue and land leases payable | |||||||
Net cash provided by operating activities | |||||||
Investing Activities | |||||||
Acquisitions of real estate property | ( | ) | ( | ) | |||
Additions to land, buildings and improvements | ( | ) | ( | ) | |||
Acquisition deposits and deferred purchase price | ( | ) | |||||
Investments in unconsolidated joint ventures | ( | ) | ( | ) | |||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | |||||||
Net proceeds from disposition of real estate/joint venture interest | |||||||
Other investments | ( | ) | |||||
Origination of debt and preferred equity investments | ( | ) | ( | ) | |||
Repayments or redemption of debt and preferred equity investments | |||||||
Net cash (used in) provided by investing activities | ( | ) | |||||
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Financing Activities | |||||||
Proceeds from mortgages and other loans payable | $ | $ | |||||
Repayments of mortgages and other loans payable | ( | ) | ( | ) | |||
Proceeds from revolving credit facility and senior unsecured notes | |||||||
Repayments of revolving credit facility and senior unsecured notes | ( | ) | ( | ) | |||
Proceeds from stock options exercised and DRSPP issuance | |||||||
Repurchase of common stock | ( | ) | ( | ) | |||
Redemption of preferred units | ( | ) | ( | ) | |||
Redemption of OP units | ( | ) | |||||
Distributions to noncontrolling interests in other partnerships | ( | ) | ( | ) | |||
Contributions from noncontrolling interests in other partnerships | |||||||
Acquisition of subsidiary interest from noncontrolling interest | ( | ) | |||||
Distributions paid on common and preferred units | ( | ) | ( | ) | |||
Other obligations related to loan participations | |||||||
Tax withholdings related to restricted share awards | ( | ) | ( | ) | |||
Deferred loan costs and capitalized lease obligation | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Net (decrease) increase in cash, cash equivalents, and restricted cash | ( | ) | |||||
Cash, cash equivalents, and restricted cash at beginning of year | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||||||
Conversion of units in the Operating Partnership for common stock | $ | $ | |||||
Redemption of units in the Operating Partnership for the sale of a joint venture | |||||||
Issuance of preferred units relating to a real estate acquisition | |||||||
Tenant improvements and capital expenditures payable | |||||||
Fair value adjustment to noncontrolling interest in Operating Partnership | |||||||
Deconsolidation of subsidiaries | |||||||
Transfer of assets related to assets held for sale | |||||||
Transfer of liabilities related to assets held for sale | |||||||
Removal of fully depreciated commercial real estate properties | |||||||
Contribution to consolidated joint venture by noncontrolling interest | |||||||
Share repurchase payable | |||||||
Recognition of right of use assets and related lease liabilities |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Consolidated | Unconsolidated | Total | |||||||||||||||||||||
Location | Property Type | Number of Properties | Approximate Square Feet (unaudited) | Number of Properties | Approximate Square Feet (unaudited) | Number of Properties | Approximate Square Feet (unaudited) | Weighted Average Occupancy(1) (unaudited) | |||||||||||||||
Commercial: | |||||||||||||||||||||||
Manhattan | Office | % | |||||||||||||||||||||
Retail | (2) | % | |||||||||||||||||||||
Development/Redevelopment | % | ||||||||||||||||||||||
Fee Interest | % | ||||||||||||||||||||||
% | |||||||||||||||||||||||
Suburban | Office | % | |||||||||||||||||||||
Retail | % | ||||||||||||||||||||||
Development/Redevelopment | % | ||||||||||||||||||||||
% | |||||||||||||||||||||||
Total commercial properties | % | ||||||||||||||||||||||
Residential: | |||||||||||||||||||||||
Manhattan | Residential | (2) | % | ||||||||||||||||||||
Suburban | Residential | % | |||||||||||||||||||||
Total residential properties | % | ||||||||||||||||||||||
Total portfolio | % |
(1) | The weighted average occupancy for commercial properties represents the total occupied square footage divided by the total square footage at acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by the total available units. |
(2) | As of September 30, 2019, we owned a building at 315 West 33rd Street, also known as The Olivia, that was comprised of approximately |
September 30, 2019 | December 31, 2018 | ||||||
Identified intangible assets (included in other assets): | |||||||
Gross amount | $ | $ | |||||
Accumulated amortization | ( | ) | ( | ) | |||
Net(1) | $ | $ | |||||
Identified intangible liabilities (included in deferred revenue): | |||||||
Gross amount | $ | $ | |||||
Accumulated amortization | ( | ) | ( | ) | |||
Net(1) | $ | $ |
(1) | As of September 30, 2019, and December 31, 2018, no net intangible assets and no net intangible liabilities, were reclassified to assets held for sale and liabilities related to assets held for sale. |
September 30, 2019 | December 31, 2018 | ||||||
Commercial mortgage-backed securities | $ | $ | |||||
Total marketable securities available-for-sale | $ | $ |
Property | Three months ended September 30, 2019 |
1185 Avenue of the Americas | |
11 Madison Avenue | |
420 Lexington Avenue | |
1515 Broadway | |
One Madison Avenue | |
220 East 42nd Street | 5.2% |
Property | Acquisition Date | Property Type | Approximate Square Feet | Gross Asset Valuation (in millions) | ||||||
106 Spring Street(1) | April 2019 | Fee Interest | $ | |||||||
460 West 34th Street(2) | May 2019 | Fee Interest | ||||||||
110 Greene Street(3) | May 2019 | Fee Interest |
(1) | In April 2019, the Company accepted an assignment of the equity interests in the property in lieu of repayment of the Company's debt investment and marked the assets received and liabilities assumed to fair value. |
(2) | In May 2019, the Company closed on the acquisition of a majority and controlling |
(3) | In May 2019, the Company acquired from our joint venture partner the remaining |
Property | Disposition Date | Property Type | Approximate Square Feet | Sales Price(1) (in millions) | Gain (loss) (in millions) | ||||||||||
115 Spring Street (2) | August 2019 | Fee Interest | $ | $ |
(1) | Sales price represents the gross sales price for a property or the gross asset valuation for interests in a property. |
(2) | The Company sold a |
September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of year (1) | $ | $ | |||||
Debt investment originations/accretion (2) | |||||||
Preferred equity investment originations/accretion (2) | |||||||
Redemptions/sales/syndications/amortization (3) | ( | ) | ( | ) | |||
Net change in loan loss reserves | ( | ) | |||||
Balance at end of period (1) | $ | $ |
(1) | Net of unamortized fees, discounts, and premiums. |
(2) | Accretion includes amortization of fees and discounts and paid-in-kind investment income. |
(3) | Certain participations in debt investments that were sold or syndicated, but did not meet the conditions for sale accounting, are included in other assets and other liabilities on the consolidated balance sheets. |
September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of year | $ | $ | |||||
Expensed | |||||||
Recoveries | |||||||
Charge-offs and reclassifications | ( | ) | ( | ) | |||
Balance at end of period | $ | $ |
Loan Type | September 30, 2019 Future Funding Obligations | September 30, 2019 Senior Financing | September 30, 2019 Carrying Value (1) | December 31, 2018 Carrying Value (1) | Maturity Date (2) | |||||||||||||
Fixed Rate Investments: | ||||||||||||||||||
Mezzanine Loan(3a) | $ | $ | $ | $ | March 2020 | |||||||||||||
Mezzanine Loan | September 2021 | |||||||||||||||||
Mezzanine Loan | April 2022 | |||||||||||||||||
Mezzanine Loan | August 2022 | |||||||||||||||||
Mezzanine Loan | June 2023 | |||||||||||||||||
Mezzanine Loan | November 2023 | |||||||||||||||||
Mezzanine Loan | December 2023 | |||||||||||||||||
Mezzanine Loan(3b) | June 2024 | |||||||||||||||||
Mezzanine Loan | January 2025 | |||||||||||||||||
Mezzanine Loan | June 2027 | |||||||||||||||||
Mezzanine Loan(4) | ||||||||||||||||||
Total fixed rate | $ | $ | $ | $ | ||||||||||||||
Floating Rate Investments: | ||||||||||||||||||
Mezzanine Loan(5) | May 2019 | |||||||||||||||||
Mezzanine Loan(5) | May 2019 | |||||||||||||||||
Mortgage/Mezzanine Loan(6) | September 2019 | |||||||||||||||||
Mezzanine Loan(7) | October 2019 | |||||||||||||||||
Mortgage/Mezzanine Loan | January 2020 | |||||||||||||||||
Mezzanine Loan | January 2020 | |||||||||||||||||
Mortgage Loan | February 2020 | |||||||||||||||||
Mortgage/Mezzanine Loan | March 2020 | |||||||||||||||||
Mezzanine Loan | March 2020 | |||||||||||||||||
Mezzanine Loan | April 2020 | |||||||||||||||||
Mezzanine Loan | July 2020 | |||||||||||||||||
Mortgage/Mezzanine Loan | August 2020 | |||||||||||||||||
Mortgage/Mezzanine Loan | October 2020 | |||||||||||||||||
Mezzanine Loan | November 2020 |
Loan Type | September 30, 2019 Future Funding Obligations | September 30, 2019 Senior Financing | September 30, 2019 Carrying Value (1) | December 31, 2018 Carrying Value (1) | Maturity Date (2) | |||||||||||||
Mortgage and Mezzanine Loan | December 2020 | |||||||||||||||||
Mortgage/Mezzanine Loan | April 2021 | |||||||||||||||||
Mezzanine Loan | April 2021 | |||||||||||||||||
Jr. Mortgage Participation/Mezzanine Loan | July 2021 | |||||||||||||||||
Mezzanine Loan | July 2021 | |||||||||||||||||
Mortgage/Jr. Mortgage Participation Loan | ||||||||||||||||||
Mortgage/Mezzanine Loan | ||||||||||||||||||
Mortgage and Mezzanine Loan | ||||||||||||||||||
Mezzanine Loan | ||||||||||||||||||
Mezzanine Loan | ||||||||||||||||||
Mezzanine Loan | ||||||||||||||||||
Mezzanine Loan(8) | ||||||||||||||||||
Total floating rate | $ | $ | $ | $ | ||||||||||||||
Total | $ | $ | $ | $ |
(1) | Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees. |
(2) | Represents contractual maturity, excluding any unexercised extension options. |
(3) | Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $ |
(4) | This loan was sold in 2019. |
(5) | This loan is in maturity default. No impairment was recorded as the Company believes that the fair value of the property exceeded the carrying amount of the loans. |
(6) | This loan was in maturity default as of September 30, 2019, but was repaid in October 2019. |
(7) | This loan was repaid in October 2019. |
(8) | In 2019, the Company accepted an assignment of the equity interests in the property in lieu of repayment, and marked the assets received and liabilities assumed to fair value. |
Type | September 30, 2019 Future Funding Obligations | September 30, 2019 Senior Financing | September 30, 2019 Carrying Value (1) | December 31, 2018 Carrying Value (1) | Mandatory Redemption (2) | |||||||||||||
Preferred Equity | $ | $ | $ | $ | April 2021 | |||||||||||||
Preferred Equity | June 2022 | |||||||||||||||||
Total | $ | $ | $ | $ |
(1) | Carrying value is net of deferred origination fees. |
(2) | Represents contractual maturity, excluding any unexercised extension options. |
Property | Partner | Ownership Interest(1) | Economic Interest(1) | Unaudited Approximate Square Feet | |
100 Park Avenue | Prudential Real Estate Investors | ||||
717 Fifth Avenue | Jeff Sutton/Private Investor | ||||
800 Third Avenue | Private Investors | ||||
919 Third Avenue(2) | New York State Teacher's Retirement System | ||||
11 West 34th Street | Private Investor/Jeff Sutton | ||||
280 Park Avenue | Vornado Realty Trust | ||||
1552-1560 Broadway(3) | Jeff Sutton | ||||
10 East 53rd Street | Canadian Pension Plan Investment Board | ||||
21 East 66th Street(4) | Private Investors | ||||
650 Fifth Avenue(5) | Jeff Sutton | ||||
121 Greene Street | Jeff Sutton | ||||
55 West 46th Street | Prudential Real Estate Investors | ||||
Stonehenge Portfolio(6) | Various | Various | Various | ||
605 West 42nd Street | The Moinian Group | ||||
11 Madison Avenue | PGIM Real Estate | ||||
333 East 22nd Street | Private Investors | ||||
400 East 57th Street(7) | BlackRock, Inc and Stonehenge Partners | ||||
One Vanderbilt | National Pension Service of Korea/Hines Interest LP | ||||
Worldwide Plaza | RXR Realty / New York REIT / Private Investor | ||||
1515 Broadway | Allianz Real Estate of America | ||||
2 Herald Square | Israeli Institutional Investor | ||||
115 Spring Street | Private Investor |
(1) | Ownership interest and economic interest represent the Company's interests in the joint venture as of September 30, 2019. Changes in ownership or economic interests within the current year are disclosed in the notes below. |
(2) | In January 2018, the partnership agreement for our investment was modified resulting in the Company no longer having a controlling interest in this investment. As a result, the investment was deconsolidated as of January 1, 2018. We recorded our non-controlling interest at fair value resulting in a $ |
(3) | The acquisition price represents only the purchase of the 1552 Broadway interest, which comprised approximately |
(4) | We hold a |
(5) | The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. In connection with the ground lease obligation, SLG provided a performance guaranty and our joint venture partner executed a contribution agreement to reflect its pro rata obligation. In the event the property is converted into a condominium unit and the landlord elects the purchase option, the joint venture shall be obligated to acquire the unit at the then fair value. |
(6) | We, together with our joint venture partner, closed on the sale of |
(7) | In October 2016, we sold a |
Loan Type | September 30, 2019 | December 31, 2018 | Maturity Date | |||||||
Mezzanine Loan | February 2022 | |||||||||
$ | $ |
Property | Ownership Interest | Disposition Date | Gross Asset Valuation (in thousands)(1) | Gain (Loss) on Sale (in thousands)(2) | ||||||||
131-137 Spring Street | January 2019 | $ | $ | |||||||||
521 Fifth Avenue | May 2019 | |||||||||||
Stonehenge Portfolio (partial) | Various | Various | ( | ) |
(1) | Represents implied gross valuation for the joint venture or sales price of the property. |
(2) | Represents the Company's share of the gain (loss). Gain (loss) amounts do not include adjustments for expenses recorded in subsequent periods. |
Property | Economic Interest (1) | Maturity Date | Interest Rate (2) | September 30, 2019 | December 31, 2018 | ||||||||||||
Fixed Rate Debt: | |||||||||||||||||
717 Fifth Avenue (mortgage) | % | July 2022 | % | $ | $ | ||||||||||||
717 Fifth Avenue (mezzanine) | % | July 2022 | % | ||||||||||||||
650 Fifth Avenue (mortgage) | % | October 2022 | % | ||||||||||||||
650 Fifth Avenue (mezzanine) | % | October 2022 | % | ||||||||||||||
21 East 66th Street | % | April 2023 | % | ||||||||||||||
919 Third Avenue | % | June 2023 | % | ||||||||||||||
1515 Broadway | % | March 2025 | % | ||||||||||||||
11 Madison Avenue | % | September 2025 | % | ||||||||||||||
800 Third Avenue | % | February 2026 | % | ||||||||||||||
400 East 57th Street | % | November 2026 | % | ||||||||||||||
Worldwide Plaza | % | November 2027 | % | ||||||||||||||
Stonehenge Portfolio (3) | Various | Various | % | ||||||||||||||
521 Fifth Avenue (4) | |||||||||||||||||
Total fixed rate debt | $ | $ |
Property | Economic Interest (1) | Maturity Date | Interest Rate (2) | September 30, 2019 | December 31, 2018 | ||||||||||||
Floating Rate Debt: | |||||||||||||||||
121 Greene Street | % | November 2019 | L+ | % | $ | $ | |||||||||||
10 East 53rd Street | % | February 2020 | L+ | % | |||||||||||||
280 Park Avenue | % | September 2020 | L+ | % | |||||||||||||
1552 Broadway | % | October 2020 | L+ | % | |||||||||||||
11 West 34th Street | % | January 2021 | L+ | % | |||||||||||||
100 Park Avenue | % | February 2021 | L+ | % | |||||||||||||
One Vanderbilt (5) | % | September 2021 | L+ | % | |||||||||||||
2 Herald Square | % | November 2021 | L+ | % | |||||||||||||
55 West 46th Street (6) | % | August 2022 | L+ | % | |||||||||||||
115 Spring Street | % | September 2023 | L+ | % | |||||||||||||
605 West 42nd Street | % | August 2027 | L+ | % | |||||||||||||
21 East 66th Street | % | June 2033 | 1 Year Treasury+ | % | |||||||||||||
131-137 Spring Street (7) | |||||||||||||||||
103 East 86th Street (8) | |||||||||||||||||
Total floating rate debt | $ | $ | |||||||||||||||
Total joint venture mortgages and other loans payable | $ | $ | |||||||||||||||
Deferred financing costs, net | ( | ) | ( | ) | |||||||||||||
Total joint venture mortgages and other loans payable, net | $ | $ |
(1) | Economic interest represents the Company's interests in the joint venture as of September 30, 2019. Changes in ownership or economic interests, if any, within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above. |
(2) | Interest rates as of September 30, 2019, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified. |
(3) | Amount is comprised of $ |
(4) | In May 2019, we, along with our joint venture partner, closed on the sale of the property. |
(5) | This loan is a $ |
(6) | In August 2019, this loan was refinanced with a new $ |
(7) | In January 2019, we closed on the sale of our interest in the property. |
(8) | In February 2019, we, along with our joint venture partner, closed on the sale of the property. |
September 30, 2019 | December 31, 2018 | ||||||
Assets (1) | |||||||
Commercial real estate property, net | $ | $ | |||||
Cash and restricted cash | |||||||
Tenant and other receivables, related party receivables, and deferred rents receivable | |||||||
Debt and preferred equity investments, net | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and equity (1) | |||||||
Mortgages and other loans payable, net | $ | $ | |||||
Deferred revenue/gain | |||||||
Lease liabilities | |||||||
Other liabilities | |||||||
Equity | |||||||
Total liabilities and equity | $ | $ | |||||
Company's investments in unconsolidated joint ventures | $ | $ |
(1) | The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Total revenues | $ | $ | $ | $ | |||||||||||
Operating expenses | |||||||||||||||
Operating lease rent | |||||||||||||||
Real estate taxes | |||||||||||||||
Interest expense, net of interest income | |||||||||||||||
Amortization of deferred financing costs | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Total expenses | |||||||||||||||
Loss on early extinguishment of debt | ( | ) | ( | ) | |||||||||||
Net loss before gain on sale (1) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Company's equity in net (loss) income from unconsolidated joint ventures (1) | $ | ( | ) | $ | $ | ( | ) | $ |
(1) | The combined statements of operations and the Company's equity in net (loss) income for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018. |
September 30, 2019 | December 31, 2018 | ||||||
Deferred leasing costs | $ | $ | |||||
Less: accumulated amortization | ( | ) | ( | ) | |||
Deferred costs, net | $ | $ |
Property | Maturity Date | Interest Rate (1) | September 30, 2019 | December 31, 2018 | ||||||||||
Fixed Rate Debt: | ||||||||||||||
762 Madison Avenue | February 2022 | % | ||||||||||||
100 Church Street | July 2022 | % | ||||||||||||
420 Lexington Avenue | October 2024 | % | ||||||||||||
400 East 58th Street (2) | November 2026 | % | ||||||||||||
Landmark Square | January 2027 | % | ||||||||||||
485 Lexington Avenue | February 2027 | % | ||||||||||||
1080 Amsterdam (3) | February 2027 | % | ||||||||||||
315 West 33rd Street | February 2027 | % | ||||||||||||
Total fixed rate debt | $ | $ | ||||||||||||
Floating Rate Debt: | ||||||||||||||
FHLB Facility | December 2019 | L+ | % | |||||||||||
FHLB Facility | January 2020 | L+ | % | |||||||||||
FHLB Facility | February 2020 | L+ | % | |||||||||||
2017 Master Repurchase Agreement | June 2020 | L+ | % | |||||||||||
133 Greene Street | August 2020 | L+ | % | |||||||||||
106 Spring Street | January 2021 | L+ | % | |||||||||||
609 Fifth Avenue | March 2021 | L+ | % | |||||||||||
185 Broadway (4) | November 2021 | L+ | % | |||||||||||
712 Madison Avenue | December 2021 | L+ | % | |||||||||||
460 West 34th Street (5) | May 2022 | L+ | % | |||||||||||
Suburban Loan (6) | July 2022 | L+ | % | |||||||||||
719 Seventh Avenue | September 2023 | L+ | % | |||||||||||
FHLB Facility (7) | ||||||||||||||
115 Spring Street (8) | ||||||||||||||
Total floating rate debt | $ | $ | ||||||||||||
Total mortgages and other loans payable | $ | $ | ||||||||||||
Deferred financing costs, net of amortization | ( | ) | ( | ) | ||||||||||
Total mortgages and other loans payable, net | $ | $ |
(1) | Interest rate as of September 30, 2019, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified. |
(2) | The loan carries a fixed interest rate of |
(3) | The loan is comprised of a $ |
(4) | This loan is a $ |
(5) | This loan is a $ |
(6) | Collateralized by the properties located at 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive and 500 Summit Lake Drive. |
(7) | In August 2019, the loan was repaid. |
(8) | In August 2019, the Company sold a |
Issuance | September 30, 2019 Unpaid Principal Balance | September 30, 2019 Accreted Balance | December 31, 2018 Accreted Balance | Interest Rate (1) | Initial Term (in Years) | Maturity Date | ||||||||||||||
March 16, 2010 (2) | $ | $ | $ | % | March 2020 | |||||||||||||||
August 7, 2018 (3) (4) | L+ | % | August 2021 | |||||||||||||||||
October 5, 2017 (3) | % | October 2022 | ||||||||||||||||||
November 15, 2012 (5) | % | December 2022 | ||||||||||||||||||
December 17, 2015 (2) | % | December 2025 | ||||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Deferred financing costs, net | ( | ) | ( | ) | ||||||||||||||||
$ | $ | $ |
(1) | Interest rate as of September 30, 2019, taking into account interest rate hedges in effect during the period. Floating rate notes are presented with the stated spread over 3-month LIBOR, unless otherwise specified. |
(2) | Issued by the Company and the Operating Partnership as co-obligors. |
(3) | Issued by the Operating Partnership with the Company as the guarantor. |
(4) | Beginning on August 8, 2019 and at any time thereafter, the notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to |
(5) | In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $ |
Scheduled Amortization | Mortgages and Other Loans Payable | Revolving Credit Facility | Unsecured Term Loans | Trust Preferred Securities | Senior Unsecured Notes | Total | Joint Venture Debt | ||||||||||||||||||||||||
Remaining 2019 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest expense before capitalized interest | $ | $ | $ | $ | |||||||||||
Interest on financing leases | |||||||||||||||
Interest capitalized | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense, net | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||
Due from joint ventures | $ | $ | |||||
Other | |||||||
Related party receivables | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of period | $ | $ | |||||
Distributions | ( | ) | ( | ) | |||
Issuance of common units | |||||||
Redemption of common units | ( | ) | ( | ) | |||
Net income | |||||||
Accumulated other comprehensive income allocation | ( | ) | ( | ) | |||
Fair value adjustment | ( | ) | |||||
Balance at end of period | $ | $ |
Issuance | Number of Units Authorized | Number of Units Issued | Dividends Per Unit(1) | Liquidation Preference Per Unit(2) | Conversion Price Per Unit(3) | Date of Issuance | ||||||||||||||
4.50% Series G (4) | $ | $ | $ | January 2012 | ||||||||||||||||
7.00% Series F | $ | $ | $ | January 2007 | ||||||||||||||||
3.50% Series K | $ | $ | $ | August 2014 | ||||||||||||||||
4.00% Series L | $ | $ | August 2014 | |||||||||||||||||
3.75% Series M | $ | $ | February 2015 | |||||||||||||||||
3.00% Series N (5) | $ | $ | June 2015 | |||||||||||||||||
Series O (6) | (6 | ) | (6 | ) | June 2015 | |||||||||||||||
4.00% Series P | $ | $ | July 2015 | |||||||||||||||||
3.50% Series Q | $ | $ | $ | July 2015 | ||||||||||||||||
3.50% Series R | $ | $ | $ | August 2015 | ||||||||||||||||
4.00% Series S | $ | $ | August 2015 | |||||||||||||||||
2.75% Series T | $ | $ | $ | March 2016 | ||||||||||||||||
4.50% Series U (7) | $ | $ | March 2016 | |||||||||||||||||
3.50% Series A (8) | $ | $ | August 2015 | |||||||||||||||||
3.50% Series V | $ | $ | May 2019 |
(1) | Dividends are cumulative, subject to certain provisions. |
(2) | Units are redeemable at any time at par for cash at the option of the unitholder unless otherwise specified. |
(3) | If applicable, units are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) the amount shown in the table. |
(4) | Common units of limited partnership interest in the Operating Partnership issued in a conversion may be redeemed in exchange for our common stock on a |
(5) | All of the outstanding units were redeemed at par for cash by the unitholder during the nine months ended September 30, 2019. |
(6) | The holder of the Series O preferred unit is entitled to quarterly dividends in an amount calculated as (i) |
(7) | The annual dividend is subject to reduction upon the occurrence of certain circumstances. The minimum annual dividend is $ |
(8) | Issued through a consolidated subsidiary. The units are convertible on a one-for-one basis, into the Series B Preferred Units of limited partnership interest, or the Subsidiary Series B Preferred Units. The Subsidiary Series B Preferred Units can be converted at any time, at the option of the unitholder, into a number of common stock equal to |
September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of period | $ | $ | |||||
Issuance of preferred units | |||||||
Redemption of preferred units | ( | ) | ( | ) | |||
Balance at end of period | $ | $ |
Period | Shares repurchased | Average price paid per share | Cumulative number of shares repurchased as part of the repurchase plan or programs |
Year ended 2017 | $ | ||
Year ended 2018 | $ | ||
First quarter 2019 | $ | ||
Second quarter 2019 | $ | ||
Third quarter 2019 (1) | $ |
(1) | Includes |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Shares of common stock issued | |||||||||||||||
Dividend reinvestments/stock purchases under the DRSPP | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Numerator | 2019 | 2018 | 2019 | 2018 | |||||||||||
Basic Earnings: | |||||||||||||||
Income attributable to SL Green common stockholders | $ | $ | $ | $ | |||||||||||
Less: distributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Less: undistributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | |||||||||
Net income attributable to SL Green common stockholders (numerator for basic earnings per share) | $ | $ | $ | $ | |||||||||||
Add back: distributed earnings allocated to participating securities | |||||||||||||||
Add back: undistributed earnings allocated to participating securities | |||||||||||||||
Add back: Effect of dilutive securities (redemption of units to common shares) | |||||||||||||||
Income attributable to SL Green common stockholders (numerator for diluted earnings per share) | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
Denominator | 2019 | 2018 | 2019 | 2018 | |||||||
Basic Shares: | |||||||||||
Weighted average common stock outstanding | |||||||||||
Effect of Dilutive Securities: | |||||||||||
Operating Partnership units redeemable for common shares | |||||||||||
Stock-based compensation plans | |||||||||||
Diluted weighted average common stock outstanding |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Numerator | 2019 | 2018 | 2019 | 2018 | |||||||||||
Basic Earnings: | |||||||||||||||
Income attributable to SLGOP common unitholders | $ | $ | $ | $ | |||||||||||
Less: distributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Less: undistributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | |||||||||
Net Income attributable to SLGOP common unitholders (numerator for basic earnings per unit) | $ | $ | $ | $ | |||||||||||
Add back: distributed earnings allocated to participating securities | |||||||||||||||
Add back: undistributed earnings allocated to participating securities | |||||||||||||||
Income attributable to SLGOP common unitholders (numerator for diluted earnings per unit) | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
Denominator | 2019 | 2018 | 2019 | 2018 | |||||||
Basic units: | |||||||||||
Weighted average common units outstanding | |||||||||||
Effect of Dilutive Securities: | |||||||||||
Stock-based compensation plans | |||||||||||
Diluted weighted average common units outstanding |
September 30, 2019 | December 31, 2018 | |||
Dividend yield | % | |||
Expected life | ||||
Risk-free interest rate | % | |||
Expected stock price volatility | % |
September 30, 2019 | December 31, 2018 | ||||||||||||||
Options Outstanding | Weighted Average Exercise Price | Options Outstanding | Weighted Average Exercise Price | ||||||||||||
Balance at beginning of period | $ | $ | |||||||||||||
Granted | |||||||||||||||
Exercised | ( | ) | |||||||||||||
Lapsed or canceled | ( | ) | ( | ) | |||||||||||
Balance at end of period | $ | $ | |||||||||||||
Options exercisable at end of period | $ | $ | |||||||||||||
Total fair value of options granted during the period | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||
Balance at beginning of period | |||||||
Granted | |||||||
Canceled | ( | ) | ( | ) | |||
Balance at end of period | |||||||
Vested during the period | |||||||
Compensation expense recorded | $ | $ | |||||
Total fair value of restricted stock granted during the period | $ | $ |
Net unrealized gain (loss) on derivative instruments (1) | SL Green’s share of joint venture net unrealized gain (loss) on derivative instruments (2) | Net unrealized gain on marketable securities | Total | ||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | |||||||||||
Other comprehensive (loss) income before reclassifications | ( | ) | ( | ) | ( | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | |||||||||
Balance at September 30, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
(1) | Amount reclassified from accumulated other comprehensive income (loss) is included in interest expense in the respective consolidated statements of operations. As of September 30, 2019 and December 31, 2018, the deferred net (gains) losses from these terminated hedges, which is included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument, was $( |
(2) | Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures in the respective consolidated statements of operations. |
September 30, 2019 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Marketable securities | $ | $ | $ | $ | |||||||||||
Interest rate cap and swap agreements (included in other assets) | $ | $ | $ | $ | |||||||||||
Liabilities: | |||||||||||||||
Interest rate cap and swap agreements (included in other liabilities) | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Marketable securities | $ | $ | $ | $ | |||||||||||
Interest rate cap and swap agreements (included in other assets) | $ | $ | $ | $ | |||||||||||
Liabilities: | |||||||||||||||
Interest rate cap and swap agreements (included in other liabilities) | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||||||||||
Carrying Value (1) | Fair Value | Carrying Value (1) | Fair Value | ||||||||||||
Debt and preferred equity investments | $ | (2) | $ | (2) | |||||||||||
Fixed rate debt | $ | $ | $ | $ | |||||||||||
Variable rate debt | |||||||||||||||
$ | $ | $ | $ |
(1) | Amounts exclude net deferred financing costs. |
(2) | At September 30, 2019, debt and preferred equity investments had an estimated fair value ranging between $ |
Notional Value | Strike Rate | Effective Date | Expiration Date | Balance Sheet Location | Fair Value | |||||||||||
Interest Rate Cap | $ | % | November 2018 | December 2019 | Other Assets | $ | ||||||||||
Interest Rate Cap | % | May 2019 | May 2020 | Other Assets | ||||||||||||
Interest Rate Swap | % | December 2017 | November 2020 | Other Liabilities | ( | ) | ||||||||||
Interest Rate Swap | % | December 2017 | November 2020 | Other Liabilities | ( | ) | ||||||||||
Interest Rate Cap | % | March 2019 | March 2021 | Other Assets | ||||||||||||
Interest Rate Swap | % | July 2016 | July 2023 | Other Assets | ||||||||||||
Interest Rate Swap | % | July 2016 | July 2023 | Other Assets | ||||||||||||
Interest Rate Swap | % | January 2019 | January 2024 | Other Liabilities | ( | ) | ||||||||||
Interest Rate Swap | % | January 2019 | January 2026 | Other Liabilities | ( | ) | ||||||||||
Interest Rate Swap | % | January 2019 | January 2026 | Other Liabilities | ( | ) | ||||||||||
$ | ( | ) |
Amount of (Loss) Gain Recognized in Other Comprehensive Loss | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||
Derivative | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Interest Rate Swaps/Caps | $ | ( | ) | $ | Interest expense | $ | ( | ) | $ | |||||||||
Share of unconsolidated joint ventures' derivative instruments | ( | ) | Equity in net income from unconsolidated joint ventures | ( | ) | |||||||||||||
$ | ( | ) | $ | $ | ( | ) | $ |
Amount of (Loss) Gain Recognized in Other Comprehensive Loss | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
Derivative | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Interest Rate Swaps/Caps | $ | ( | ) | $ | Interest expense | $ | $ | |||||||||||
Share of unconsolidated joint ventures' derivative instruments | ( | ) | Equity in net income from unconsolidated joint ventures | |||||||||||||||
$ | ( | ) | $ | $ | $ |
Consolidated Properties | Unconsolidated Properties | |||||||
Remaining 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
$ | $ |
Consolidated Properties | Unconsolidated Properties | |||||||
2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
Thereafter | ||||||||
$ | $ |
Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | |||||||||||||
Fixed lease payments | $ | $ | $ | $ | ||||||||||||
Variable lease payments | ||||||||||||||||
Total lease payments | $ | $ | $ | $ | ||||||||||||
Amortization of acquired above and below-market leases | ||||||||||||||||
Total rental revenue | $ | $ | $ | $ |
Financing leases | Operating leases (1) | |||||||
Remaining 2019 | $ | $ | ||||||
2020 | ||||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
Total minimum lease payments | $ | $ | ||||||
Amount representing interest | ( | ) | ||||||
Amount discounted using incremental borrowing rate | ( | ) | ||||||
Lease liabilities | $ | $ |
(1) | As of September 30, 2019, the total minimum sublease rentals to be received in the future under non-cancelable subleases is $ |
Real Estate Segment | Debt and Preferred Equity Segment | Total Company | ||||||||||
Total revenues | ||||||||||||
Three months ended: | ||||||||||||
September 30, 2019 | $ | $ | $ | |||||||||
September 30, 2018 | ||||||||||||
Nine months ended: | ||||||||||||
September 30, 2019 | ||||||||||||
September 30, 2018 | ||||||||||||
Net income | ||||||||||||
Three months ended: | ||||||||||||
September 30, 2019 | $ | $ | $ | |||||||||
September 30, 2018 | ||||||||||||
Nine months ended: | ||||||||||||
September 30, 2019 | ||||||||||||
September 30, 2018 | ||||||||||||
Total assets | ||||||||||||
As of: | ||||||||||||
September 30, 2019 | $ | $ | $ | |||||||||
December 31, 2018 |
Consolidated | Unconsolidated | Total | |||||||||||||||||||||
Location | Property Type | Number of Properties | Approximate Square Feet (unaudited) | Number of Properties | Approximate Square Feet (unaudited) | Number of Properties | Approximate Square Feet (unaudited) | Weighted Average Occupancy(1) (unaudited) | |||||||||||||||
Commercial: | |||||||||||||||||||||||
Manhattan | Office | 20 | 12,387,091 | 10 | 11,216,183 | 30 | 23,603,274 | 94.2 | % | ||||||||||||||
Retail | 6 | (2) | 320,430 | 8 | 289,050 | 14 | 609,480 | 98.9 | % | ||||||||||||||
Development/Redevelopment | 6 | 870,173 | 1 | — | 7 | 870,173 | 77.5 | % | |||||||||||||||
Fee Interest | — | — | 1 | — | 1 | — | — | % | |||||||||||||||
32 | 13,577,694 | 20 | 11,505,233 | 52 | 25,082,927 | 93.8 | % | ||||||||||||||||
Suburban | Office | 13 | 2,295,200 | — | — | 13 | 2,295,200 | 89.4 | % | ||||||||||||||
Retail | 1 | 52,000 | — | — | 1 | 52,000 | 100.0 | % | |||||||||||||||
Development/Redevelopment | 1 | 1,000 | — | — | 1 | 1,000 | — | % | |||||||||||||||
15 | 2,348,200 | — | — | 15 | 2,348,200 | 89.6 | % | ||||||||||||||||
Total commercial properties | 47 | 15,925,894 | 20 | 11,505,233 | 67 | 27,431,127 | 93.4 | % | |||||||||||||||
Residential: | |||||||||||||||||||||||
Manhattan | Residential | 2 | (2) | 445,105 | 8 | 1,663,774 | 10 | 2,108,879 | 95.0 | % | |||||||||||||
Suburban | Residential | — | — | — | — | — | — | — | % | ||||||||||||||
Total residential properties | 2 | 445,105 | 8 | 1,663,774 | 10 | 2,108,879 | 95.0 | % | |||||||||||||||
Total portfolio | 49 | 16,370,999 | 28 | 13,169,007 | 77 | 29,540,006 | 93.5 | % |
(1) | The weighted average occupancy for commercial properties represents the total occupied square footage divided by the total square footage at acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by the total available units. |
(2) | As of September 30, 2019, we owned a building at 315 West 33rd Street, also known as The Olivia, that was comprised of approximately 270,132 square feet (unaudited) of retail space and approximately 222,855 square feet (unaudited) of residential space. For the purpose of this report, we have included this building in the number of retail properties we own. However, we have included only the retail square footage in the retail approximate square footage, and have listed the balance of the square footage as residential square footage. |
i. | “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2018 and still owned by us in the same manner at September 30, 2019 (Same-Store Properties totaled 39 of our 49 consolidated operating properties), |
ii. | “Acquisition Properties,” which represents all properties or interests in properties acquired in 2019 and 2018 and all non-Same-Store Properties, including properties that are under development or redevelopment, |
iii. | "Disposed Properties," which represents all properties or interests in properties sold in 2019 and 2018, and |
iv. | “Other,” which represents properties where we sold an interest resulting in deconsolidation and corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc. |
Same-Store | Disposed | Other | Consolidated | |||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | $ Change | % Change | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | $ Change | % Change | ||||||||||||||||||||||||||||||||||
Rental revenue | $ | 241.2 | $ | 238.8 | $ | 2.4 | 1.0 | % | $ | — | $ | 0.4 | $ | 6.8 | $ | 11.7 | $ | 248.0 | $ | 250.9 | $ | (2.9 | ) | (1.2 | )% | |||||||||||||||||||||
Investment income | — | — | — | — | % | — | — | 51.5 | 49.0 | 51.5 | 49.0 | 2.5 | 5.1 | % | ||||||||||||||||||||||||||||||||
Other income | 6.3 | 1.3 | 5.0 | 384.6 | % | — | (0.6 | ) | 7.8 | 7.0 | 14.1 | 7.7 | 6.4 | 83.1 | % | |||||||||||||||||||||||||||||||
Total revenues | 247.5 | 240.1 | 7.4 | 3.1 | % | — | (0.2 | ) | 66.1 | 67.7 | 313.6 | 307.6 | 6.0 | 2.0 | % | |||||||||||||||||||||||||||||||
Property operating expenses | 109.9 | 105.9 | 4.0 | 3.8 | % | — | 0.3 | 7.9 | 8.9 | 117.8 | 115.1 | 2.7 | 2.3 | % | ||||||||||||||||||||||||||||||||
Transaction related costs | — | — | — | — | % | — | — | — | 0.2 | — | 0.2 | (0.2 | ) | (100.0 | )% | |||||||||||||||||||||||||||||||
Marketing, general and administrative | — | — | — | — | % | — | — | 23.8 | 20.6 | 23.8 | 20.6 | 3.2 | 15.5 | % | ||||||||||||||||||||||||||||||||
109.9 | 105.9 | 4.0 | 3.8 | % | — | 0.3 | 31.7 | 29.7 | 141.6 | 135.9 | 5.7 | 4.2 | % | |||||||||||||||||||||||||||||||||
Other income (expenses): | ||||||||||||||||||||||||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs, net of interest income | (51.2 | ) | (57.8 | ) | 6.6 | (11.4 | )% | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (70.5 | ) | (70.7 | ) | 0.2 | (0.3 | )% | |||||||||||||||||||||||||||||||||||||||
Equity in net (loss) income from unconsolidated joint ventures | (9.9 | ) | 1.0 | (10.9 | ) | (1,090.0 | )% | |||||||||||||||||||||||||||||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | — | 70.9 | (70.9 | ) | (100.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Purchase price and other fair value adjustments | 3.8 | (3.1 | ) | 6.9 | (222.6 | )% | ||||||||||||||||||||||||||||||||||||||||
Gain (loss) on sale of real estate, net | 3.5 | (2.5 | ) | 6.0 | (240.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Depreciable real estate reserves and impairment | (7.0 | ) | (6.7 | ) | (0.3 | ) | 4.5 | % | ||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | (2.2 | ) | 2.2 | (100.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Loan loss and other investment reserves, net of recoveries | — | (1.1 | ) | 1.1 | (100.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 40.7 | $ | 99.5 | $ | (58.8 | ) | (59.1 | )% |
Usable SF | Rentable SF | New Cash Rent (per rentable SF) (1) | Prev. Escalated Rent (per rentable SF) (2) | TI/LC per rentable SF | Free Rent (in months) | Average Lease Term (in years) | |||||||||||||||||
Manhattan | |||||||||||||||||||||||
Space available at beginning of the period | 1,460,517 | ||||||||||||||||||||||
Space which became available during the period (3) | |||||||||||||||||||||||
• Office | 117,112 | ||||||||||||||||||||||
• Retail | 41,313 | ||||||||||||||||||||||
• Storage | 433 | ||||||||||||||||||||||
158,858 | |||||||||||||||||||||||
Total space available | 1,619,375 | ||||||||||||||||||||||
Leased space commenced during the period: | |||||||||||||||||||||||
• Office(4) | 242,977 | 270,212 | $ | 78.21 | $ | 71.87 | $ | 92.13 | 5.4 | 19.2 | |||||||||||||
• Retail | 420 | 496 | $ | 90.73 | $ | — | $ | — | 4.0 | 10.0 | |||||||||||||
Total leased space commenced | 243,397 | 270,708 | $ | 78.23 | $ | 71.74 | $ | 91.96 | 5.4 | 19.2 | |||||||||||||
Total available space at end of period | 1,375,978 | ||||||||||||||||||||||
Early renewals | |||||||||||||||||||||||
• Office | 71,455 | 81,076 | $ | 71.18 | $ | 75.26 | $ | 30.76 | 0.8 | 5.4 | |||||||||||||
• Retail | 4,998 | 4,755 | $ | 220.14 | $ | 194.97 | $ | — | — | 9.3 | |||||||||||||
Total early renewals | 76,453 | 85,831 | $ | 79.43 | $ | 81.89 | $ | 29.06 | 0.8 | 5.7 | |||||||||||||
Total commenced leases, including replaced previous vacancy | |||||||||||||||||||||||
• Office | 351,288 | $ | 76.59 | $ | 73.39 | $ | 77.97 | 4.4 | 16.1 | ||||||||||||||
• Retail | 5,251 | $ | 207.92 | $ | 194.97 | $ | — | 0.4 | 9.3 | ||||||||||||||
Total commenced leases | 356,539 | $ | 78.52 | $ | 76.50 | $ | 76.82 | 4.3 | 16.0 |
Usable SF | Rentable SF | New Cash Rent (per rentable SF) (1) | Prev. Escalated Rent (per rentable SF) (2) | TI/LC per rentable SF | Free Rent (in months) | Average Lease Term (in years) | |||||||||||||||||
Suburban | |||||||||||||||||||||||
Space available at beginning of period | 232,313 | ||||||||||||||||||||||
Space which became available during the period(3) | |||||||||||||||||||||||
• Office | 29,364 | ||||||||||||||||||||||
• Retail | 1,091 | ||||||||||||||||||||||
• Storage | 561 | ||||||||||||||||||||||
31,016 | |||||||||||||||||||||||
Total space available | 263,329 | ||||||||||||||||||||||
Leased space commenced during the period: | |||||||||||||||||||||||
• Office(5) | 13,698 | 13,560 | $ | 34.02 | $ | 32.88 | $ | 4.97 | 0.9 | 2.4 | |||||||||||||
• Retail | 3,797 | 3,797 | $ | 11.46 | $ | 19.74 | $ | — | — | 10.8 | |||||||||||||
• Storage | 661 | 661 | $ | 12.45 | $ | 12.00 | $ | — | — | 1.3 | |||||||||||||
Total leased space commenced | 18,156 | 18,018 | $ | 28.48 | $ | 30.78 | $ | 3.74 | 0.7 | 4.2 | |||||||||||||
Total available space at end of the period | 245,173 | ||||||||||||||||||||||
Early renewals | |||||||||||||||||||||||
• Office | 15,575 | 15,575 | $ | 31.34 | $ | 29.66 | $ | — | — | 0.7 | |||||||||||||
Total early renewals | 15,575 | 15,575 | $ | 31.34 | $ | 29.66 | $ | — | — | 0.7 | |||||||||||||
Total commenced leases, including replaced previous vacancy | |||||||||||||||||||||||
• Office | 29,135 | $ | 32.59 | $ | 30.97 | $ | 2.31 | 0.4 | 1.5 | ||||||||||||||
• Retail | 3,797 | $ | 11.46 | $ | 19.74 | $ | — | — | 10.8 | ||||||||||||||
• Storage | 661 | $ | 12.45 | $ | 12.00 | $ | — | — | 1.3 | ||||||||||||||
Total commenced leases | 33,593 | $ | 29.80 | $ | 30.15 | $ | 2.01 | 0.4 | 2.6 |
(1) | Annual initial base rent. |
(2) | Escalated rent includes base rent plus all additional amounts paid by the tenant in the form of real estate taxes, operating expenses, porters wage or a consumer price index (CPI) adjustment. |
(3) | Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over. |
(4) | Average starting office rent excluding new tenants replacing vacancies was $81.87 per rentable square feet for 100,150 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $77.09 per rentable square feet for 181,226 rentable square feet. |
(5) | Average starting office rent excluding new tenants replacing vacancies was $33.87 per rentable square feet for 10,706 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $32.37 per rentable square feet for 26,281 rentable square feet. |
i. | “Same-Store Properties,” which represents all operating properties owned by us at January 1, 2018 and still owned by us in the same manner at September 30, 2019 (Same-Store Properties totaled 39 of our 49 consolidated operating properties), |
ii. | “Acquisition Properties,” which represents all properties or interests in properties acquired in 2019 and 2018 and all non- |
iii. | "Disposed Properties," which represents all properties or interests in properties sold or partially sold in 2019 and 2018, and |
iv. | “Other,” which represents properties that were partially sold resulting in deconsolidation and corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc. |
Same-Store | Disposed | Other | Consolidated | |||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | $ Change | % Change | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | $ Change | % Change | ||||||||||||||||||||||||||||||||||
Rental revenue | $ | 706.5 | $ | 690.6 | $ | 15.9 | 2.3 | % | $ | — | $ | 9.7 | $ | 26.6 | $ | 30.8 | $ | 733.1 | $ | 731.1 | $ | 2.0 | 0.3 | % | ||||||||||||||||||||||
Investment income | 3.3 | 3.5 | (0.2 | ) | (5.7 | )% | — | — | 149.9 | 140.0 | 153.2 | 143.5 | 9.7 | 6.8 | % | |||||||||||||||||||||||||||||||
Other income | 8.9 | 8.0 | 0.9 | 11.3 | % | 4.1 | 1.5 | 31.6 | 26.3 | 44.6 | 35.8 | 8.8 | 24.6 | % | ||||||||||||||||||||||||||||||||
Total revenues | 718.7 | 702.1 | 16.6 | 2.4 | % | 4.1 | 11.2 | 208.1 | 197.1 | 930.9 | 910.4 | 20.5 | 2.3 | % | ||||||||||||||||||||||||||||||||
Property operating expenses | 318.2 | 304.4 | 13.8 | 4.5 | % | 0.2 | 5.1 | 25.4 | 29.8 | 343.8 | 339.3 | 4.5 | 1.3 | % | ||||||||||||||||||||||||||||||||
Transaction related costs | 0.4 | 0.7 | (0.3 | ) | (42.9 | )% | — | — | — | — | 0.4 | 0.7 | (0.3 | ) | (42.9 | )% | ||||||||||||||||||||||||||||||
Marketing, general and administrative | 75.3 | 66.5 | 8.8 | 13.2 | % | — | — | — | 0.1 | 75.3 | 66.6 | 8.7 | 13.1 | % | ||||||||||||||||||||||||||||||||
393.9 | 371.6 | 22.3 | 6.0 | % | 0.2 | 5.1 | 25.4 | 29.9 | 419.5 | 406.6 | 12.9 | 3.2 | % | |||||||||||||||||||||||||||||||||
Other income (expenses): | ||||||||||||||||||||||||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs, net of interest income | (154.4 | ) | (166.4 | ) | 12.0 | (7.2 | )% | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (208.3 | ) | (208.0 | ) | (0.3 | ) | 0.1 | % | ||||||||||||||||||||||||||||||||||||||
Equity in net (loss) income from unconsolidated joint ventures | (22.6 | ) | 9.7 | (32.3 | ) | (333.0 | )% | |||||||||||||||||||||||||||||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | 76.2 | 136.5 | (60.3 | ) | (44.2 | )% |
Purchase price and other fair value adjustments | 69.4 | 57.4 | 12.0 | 20.9 | % | |||||||||||||||||||||||||||||||||||||||||
Gain (loss) on sale of real estate, net | 2.5 | 6.2 | (3.7 | ) | (59.7 | )% | ||||||||||||||||||||||||||||||||||||||||
Depreciable real estate reserves and impairment | (7.0 | ) | (6.7 | ) | (0.3 | ) | 4.5 | % | ||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | (2.2 | ) | 2.2 | (100.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Loan loss and other investment reserves, net of recoveries | — | (1.1 | ) | 1.1 | (100.0 | )% | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 267.2 | $ | 329.2 | $ | (62.0 | ) | (18.8 | )% |
Usable SF | Rentable SF | New Cash Rent (per rentable SF) (1) | Prev. Escalated Rent (per rentable SF) (2) | TI/LC per rentable SF | Free Rent (in months) | Average Lease Term (in years) | |||||||||||||||||
Manhattan | |||||||||||||||||||||||
Space available at beginning of the period | 1,306,846 | ||||||||||||||||||||||
Property no longer in redevelopment | 96,857 | ||||||||||||||||||||||
Sold Vacancies | (16,837 | ) | |||||||||||||||||||||
Acquired Vacancies | — | ||||||||||||||||||||||
Property in redevelopment | — | ||||||||||||||||||||||
Space which became available during the period (3) | |||||||||||||||||||||||
• Office | 668,180 | ||||||||||||||||||||||
• Retail | 59,984 | ||||||||||||||||||||||
• Storage | 13,886 | ||||||||||||||||||||||
742,050 | |||||||||||||||||||||||
Total space available | 2,128,916 | ||||||||||||||||||||||
Leased space commenced during the period: | |||||||||||||||||||||||
• Office(4) | 737,340 | 803,552 | $ | 74.17 | $ | 68.79 | $ | 90.37 | 6.6 | 14.6 | |||||||||||||
• Retail | 9,361 | 10,989 | $ | 146.10 | $ | 102.92 | $ | 54.18 | 5.9 | 14.1 | |||||||||||||
• Storage | 6,237 | 10,080 | $ | 21.46 | $ | 31.07 | $ | — | 2.0 | 16.3 | |||||||||||||
Total leased space commenced | 752,938 | 824,621 | $ | 74.48 | $ | 69.20 | $ | 88.78 | 6.6 | 14.6 | |||||||||||||
Total available space at end of period | 1,375,978 | ||||||||||||||||||||||
Early renewals | |||||||||||||||||||||||
• Office | 279,964 | 304,653 | $ | 69.43 | $ | 65.26 | $ | 33.15 | 3.2 | 7.9 | |||||||||||||
• Retail | 67,394 | 56,576 | $ | 72.00 | $ | 70.42 | $ | — | — | 1.5 | |||||||||||||
• Storage | 13,745 | 17,968 | $ | 32.18 | $ | 37.53 | $ | — | 8.5 | 15.0 | |||||||||||||
Total early renewals | 361,103 | 379,197 | $ | 68.05 | $ | 64.72 | $ | 26.63 | 3.0 | 7.2 | |||||||||||||
Total commenced leases, including replaced previous vacancy | |||||||||||||||||||||||
• Office | 1,108,205 | $ | 72.87 | $ | 67.32 | $ | 74.64 | 5.7 | 12.8 | ||||||||||||||
• Retail | 67,565 | $ | 84.05 | $ | 75.25 | $ | 8.81 | 1.0 | 3.5 | ||||||||||||||
• Storage | 28,048 | $ | 28.33 | $ | 36.34 | $ | — | 6.2 | 15.5 | ||||||||||||||
Total commenced leases | 1,203,818 | $ | 72.46 | $ | 67.13 | $ | 69.20 | 5.4 | 12.3 |
Usable SF | Rentable SF | New Cash Rent (per rentable SF) (1) | Prev. Escalated Rent (per rentable SF) (2) | TI/LC per rentable SF | Free Rent (in months) | Average Lease Term (in years) | |||||||||||||||||
Suburban | |||||||||||||||||||||||
Space available at beginning of period | 202,480 | ||||||||||||||||||||||
Space which became available during the year (3) | |||||||||||||||||||||||
• Office | 94,393 | ||||||||||||||||||||||
• Retail | 1,261 | ||||||||||||||||||||||
• Storage | 1,888 | ||||||||||||||||||||||
97,542 | |||||||||||||||||||||||
Total space available | 300,022 | ||||||||||||||||||||||
Leased space commenced during the year: | |||||||||||||||||||||||
• Office(5) | 49,657 | 49,594 | $ | 32.96 | $ | 33.62 | $ | 12.89 | 3.0 | 4.2 | |||||||||||||
• Retail | 3,797 | 3,797 | $ | 11.46 | $ | 19.74 | $ | — | — | 10.8 | |||||||||||||
• Storage | 1,395 | 2,021 | $ | 14.17 | $ | 13.95 | $ | — | — | 3.9 | |||||||||||||
Total leased space commenced | 54,849 | 55,412 | $ | 30.80 | $ | 32.21 | $ | 11.53 | 2.7 | 4.7 | |||||||||||||
Total available space at end of period | 245,173 | ||||||||||||||||||||||
Early renewals | |||||||||||||||||||||||
• Office | 103,221 | 102,521 | $ | 36.40 | $ | 37.29 | $ | 10.74 | 6.7 | 7.5 | |||||||||||||
• Storage | 248 | 248 | $ | 18.00 | $ | 18.00 | $ | — | — | 10.8 | |||||||||||||
Total early renewals | 103,469 | 102,769 | $ | 36.35 | $ | 37.25 | $ | 10.72 | 6.6 | 7.5 | |||||||||||||
Total commenced leases, including replaced previous vacancy | |||||||||||||||||||||||
• Office | 152,115 | $ | 35.27 | $ | 36.45 | $ | 11.44 | 5.5 | 6.4 | ||||||||||||||
• Retail | 3,797 | $ | 11.46 | $ | 19.74 | $ | — | — | 10.8 | ||||||||||||||
• Storage | 2,269 | $ | 14.59 | $ | 14.49 | $ | — | — | 4.7 | ||||||||||||||
Total commenced leases | 158,181 | $ | 34.41 | $ | 36.01 | $ | 11.00 | 5.3 | 6.5 |
(1) | Annual initial base rent. |
(2) | Escalated rent includes base rent plus all additional amounts paid by the tenant in the form of real estate taxes, operating expenses, porters wage or a consumer price index (CPI) adjustment. |
(3) | Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over. |
(4) | Average starting office rent excluding new tenants replacing vacancies was $73.37 per rentable square feet for 426,824 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $71.73 per rentable square feet for 731,477 rentable square feet. |
(5) | Average starting office rent excluding new tenants replacing vacancies was $34.86 per rentable square feet for 30,581 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $36.04 per rentable square feet for 133,102 rentable square feet. |
(1) | Cash flow from operations; |
(2) | Liquidity on hand; |
(3) | Net proceeds from divestitures of properties and redemptions, participations and dispositions of debt and preferred equity investments; |
(4) | Borrowings under the 2017 credit facility; |
(5) | Other forms of secured or unsecured financing; and |
(6) | Proceeds from common or preferred equity or debt offerings by the Company or the Operating Partnership (including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred securities). |
Remaining 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | |||||||||||||||||||||
Property mortgages and other loans | $ | 2,307 | $ | 26,641 | $ | 246,539 | $ | 746,882 | $ | 57,301 | $ | 1,145,406 | $ | 2,225,076 | |||||||||||||
MRA and FHLB facilities | 14,500 | 215,107 | — | — | — | — | 229,607 | ||||||||||||||||||||
Corporate obligations | — | 250,000 | 350,000 | 800,000 | 1,635,000 | 400,000 | 3,435,000 | ||||||||||||||||||||
Joint venture debt-our share | 10,700 | 804,143 | 704,174 | 268,968 | 311,452 | 1,831,026 | 3,930,463 | ||||||||||||||||||||
Total | $ | 27,507 | $ | 1,295,891 | $ | 1,300,713 | $ | 1,815,850 | $ | 2,003,753 | $ | 3,376,432 | $ | 9,820,146 |
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net cash provided by operating activities | $ | 299,433 | $ | 317,545 | $ | (18,112 | ) | ||||
Net cash (used in) provided by investing activities | $ | (240,900 | ) | $ | 500,232 | $ | (741,132 | ) | |||
Net cash used in financing activities | $ | (121,102 | ) | $ | (809,211 | ) | $ | 688,109 |
Acquisitions of real estate property | $ | (221,317 | ) |
Additions to land, buildings and improvements | 13,008 | ||
Acquisition deposits and deferred purchase price | (228 | ) | |
Investments in unconsolidated joint ventures | 184,786 | ||
Distributions in excess of cumulative earnings from unconsolidated joint ventures | (146,148 | ) | |
Net proceeds from disposition of real estate/joint venture interest | (753,402 | ) | |
Other investments | (3,482 | ) | |
Origination of debt and preferred equity investments | 96,358 | ||
Repayments or redemption of debt and preferred equity investments | 89,293 | ||
Decrease in net cash provided by investing activities | $ | (741,132 | ) |
Proceeds from mortgages and other loans payable | $ | 359,947 | |
Repayments of mortgages and other loans payable | 189,056 | ||
Proceeds from revolving credit facility and senior unsecured notes | (1,115,000 | ) | |
Repayments of revolving credit facility and senior unsecured notes | 745,000 | ||
Proceeds from stock options exercised and DRSPP issuance | (15,387 | ) | |
Repurchase of common stock | 585,068 | ||
Redemption of preferred units | (14,792 | ) | |
Redemption of OP units | (15,918 | ) | |
Distributions to noncontrolling interests in other partnerships | 1,385 | ||
Contributions from noncontrolling interests in other partnerships | (27 | ) | |
Acquisition of subsidiary interest from noncontrolling interest | (25,791 | ) | |
Distributions to noncontrolling interests in the Operating Partnership | 476 | ||
Dividends paid on common and preferred stock | 6,203 | ||
Other obligations related to loan participations | (16 | ) | |
Tax withholdings related to restricted share awards | 716 | ||
Deferred loan costs and capitalized lease obligation | (12,811 | ) | |
Decrease in net cash used in financing activities | $ | 688,109 |
Period | Shares repurchased | Average price paid per share | Cumulative number of shares repurchased as part of the repurchase plan or programs |
Year ended 2017 | 8,342,411 | $101.64 | 8,342,411 |
Year ended 2018 | 9,744,911 | $96.22 | 18,087,322 |
First quarter 2019 | 397,783 | $86.07 | 18,485,105 |
Second quarter 2019 | 866,924 | $86.58 | 19,352,029 |
Third quarter 2019 (1) | 916,439 | $81.31 | 20,268,468 |
(1) | Includes 108,300 shares of common stock repurchased by the Company in September 2019 that were settled in October 2019. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Shares of common stock issued | 490 | 509 | 3,485 | 1,183 | |||||||||||
Dividend reinvestments/stock purchases under the DRSPP | $ | 39 | $ | 52 | $ | 303 | $ | 116 |
Debt Summary: | September 30, 2019 | December 31, 2018 | |||||
Balance | |||||||
Fixed rate | $ | 2,538,829 | $ | 2,543,476 | |||
Variable rate—hedged | 1,000,000 | 1,000,000 | |||||
Total fixed rate | 3,538,829 | 3,543,476 | |||||
Total variable rate | 2,353,927 | 2,048,442 | |||||
Total debt | $ | 5,892,756 | $ | 5,591,918 | |||
Debt, preferred equity, and other investments subject to variable rate | 1,019,740 | 1,299,390 | |||||
Net exposure to variable rate debt | 1,334,187 | 749,052 | |||||
Percent of Total Debt: | |||||||
Fixed rate | 60.1 | % | 63.4 | % | |||
Variable rate (1) | 39.9 | % | 36.6 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Effective Interest Rate for the Year: | |||||||
Fixed rate | 4.05 | % | 4.34 | % | |||
Variable rate | 4.05 | % | 3.57 | % | |||
Effective interest rate | 4.04 | % | 4.06 | % |
(1) | Inclusive of the mitigating effect of our debt, preferred equity, and other investments subject to variable rate, the percent of total debt of our net exposure to variable rate debt was 27.4% and 17.5% as of September 30, 2019 and December 31, 2018, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to SL Green common stockholders | $ | 33,157 | $ | 88,209 | $ | 238,052 | $ | 293,531 | |||||||
Add: | |||||||||||||||
Depreciation and amortization | 70,464 | 70,747 | 208,268 | 208,049 | |||||||||||
Joint venture depreciation and noncontrolling interest adjustments | 47,674 | 45,485 | 145,202 | 140,799 | |||||||||||
Net income attributable to noncontrolling interests | 1,095 | 4,661 | 9,782 | 15,890 | |||||||||||
Less: | |||||||||||||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate | — | 70,937 | 76,181 | 136,522 | |||||||||||
Depreciable real estate reserves and impairment | (7,047 | ) | (6,691 | ) | (7,047 | ) | (6,691 | ) | |||||||
Gain (loss) on sale of real estate, net | 3,541 | (2,504 | ) | 2,492 | 6,227 | ||||||||||
Purchase price and other fair value adjustments | 3,799 | (3,057 | ) | 69,389 | 57,385 | ||||||||||
Depreciation on non-rental real estate assets | 740 | 616 | 2,193 | 1,766 | |||||||||||
Funds from Operations attributable to SL Green common stockholders | $ | 151,357 | $ | 149,801 | $ | 458,096 | $ | 463,060 | |||||||
Cash flows (used in) provided by operating activities | $ | 81,518 | $ | 71,333 | $ | 299,433 | $ | 317,545 | |||||||
Cash flows (used in) provided by investing activities | $ | 225,504 | $ | 232,168 | $ | (240,900 | ) | $ | 500,232 | ||||||
Cash flows provided by (used in) financing activities | $ | (331,625 | ) | $ | (424,889 | ) | $ | (121,102 | ) | $ | (809,211 | ) |
• | the effect of general economic, business and financial conditions, and their effect on the New York City real estate market in particular; |
• | dependence upon certain geographic markets; |
• | risks of real estate acquisitions, dispositions, development and redevelopment, including the cost of construction delays and cost overruns; |
• | risks relating to debt and preferred equity investments; |
• | availability and creditworthiness of prospective tenants and borrowers; |
• | bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers; |
• | adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy, and increasing availability of sublease space; |
• | availability of capital (debt and equity); |
• | unanticipated increases in financing and other costs, including a rise in interest rates; |
• | our ability to comply with financial covenants in our debt instruments; |
• | our ability to maintain our status as a REIT; |
• | risks of investing through joint venture structures, including the fulfillment by our partners of their financial obligations; |
• | the threat of terrorist attacks; |
• | our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of our insurance coverage, including as a result of environmental contamination; and |
• | legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other similar laws and regulations. |
Period | Shares repurchased | Average price paid per share | Total number of shares repurchased as part of the repurchase plan or programs |
Year ended 2017 | 8,342,411 | $101.64 | 8,342,411 |
Year ended 2018 | 9,744,911 | $96.22 | 18,087,322 |
First quarter 2019 | 397,783 | $86.07 | 18,485,105 |
Second quarter 2019 | 866,924 | $86.58 | 19,352,029 |
Third quarter 2019 (1) | 916,439 | $81.31 | 20,268,468 |
(1) | Includes 108,300 shares of common stock repurchased by the Company in September 2019 that were settled in October 2019. |
Twenty-Sixth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of May 1, 2019, incorporated by reference to the Company's Form 8-K, dated as of May 3, 2019, filed with the SEC on May 3, 2019. | ||
Certification by the Chairman and Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chairman and Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chairman and Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chairman and Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. | ||
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101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File formatted in Inline XBRL |
SL GREEN REALTY CORP. | ||||
By: | SL Green Realty Corp. | |||
/s/ Matthew J. DiLiberto | ||||
Dated: November 5, 2019 | By: | Matthew J. DiLiberto Chief Financial Officer |
Signatures | Title | Date |
/s/ Marc Holliday | Chairman of the Board of Directors and Chief Executive Officer and Director of SL Green, the sole general partner of the Operating Partnership (Principal Executive Officer) | November 5, 2019 |
Marc Holliday | ||
/s/ Andrew W. Mathias | President and Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Andrew W. Mathias | ||
/s/ Matthew J. DiLiberto | Chief Financial Officer of SL Green, the sole general partner of the Operating Partnership (Principal Financial and Accounting Officer) | November 5, 2019 |
Matthew J. DiLiberto | ||
/s/ Stephen L. Green | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Stephen L. Green | ||
/s/ John H. Alschuler, Jr. | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
John H. Alschuler, Jr. | ||
/s/ Edwin T. Burton, III | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Edwin T. Burton, III | ||
/s/ John S. Levy | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
John S. Levy | ||
/s/ Craig M. Hatkoff | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Craig M. Hatkoff | ||
/s/ Betsy S. Atkins | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Betsy S. Atkins | ||
/s/ Lauren B. Dillard | Director of SL Green, the sole general partner of the Operating Partnership | November 5, 2019 |
Lauren B. Dillard |
SL GREEN OPERATING PARTNERSHIP, L.P. | ||||
By: | /s/ Matthew J. DiLiberto | |||
Dated: November 5, 2019 | Matthew J. DiLiberto Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of SL Green Realty Corp. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 5, 2019 | ||
/s/ Marc Holliday | ||
Name: | Marc Holliday | |
Title: | Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of SL Green Realty Corp. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 5, 2019 | ||
/s/ Matthew J. DiLiberto | ||
Name: | Matthew J. DiLiberto | |
Title: | Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of SL Green Operating Partnership, L.P. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 5, 2019 | ||
/s/ Marc Holliday | ||
Name: | Marc Holliday | |
Title: | Chairman and Chief Executive Officer | |
of SL Green Realty Corp., the | ||
general partner of the registrant |
1. | I have reviewed this quarterly report on Form 10-Q of SL Green Operating Partnership, L.P. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 5, 2019 | ||
/s/ Matthew J. DiLiberto | ||
Name: | Matthew J. DiLiberto | |
Title: | Chief Financial Officer | |
of SL Green Realty Corp., the | ||
general partner of the registrant |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Marc Holliday | ||
Name: | Marc Holliday | |
Title: | Chairman and Chief Executive Officer | |
November 5, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Matthew J. DiLiberto | ||
Name: | Matthew J. DiLiberto | |
Title: | Chief Financial Officer | |
November 5, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ Marc Holliday | ||
Name: | Marc Holliday | |
Title: | Chairman and Chief Executive Officer | |
of SL Green Realty Corp., the | ||
general partner of the Operating Partnership | ||
November 5, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ Matthew J. DiLiberto | ||
Name: | Matthew J. DiLiberto | |
Title: | Chief Financial Officer | |
of SL Green Realty Corp., the | ||
general partner of the Operating Partnership | ||
November 5, 2019 |
Rental Income - Future Minimum Rents (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Lessor, Lease, Description [Line Items] | |
Total payments to be received | $ 1,700,000 |
Consolidated properties | |
Lessor, Lease, Description [Line Items] | |
Remaining 2019 | 217,473 |
2020 | 823,857 |
2021 | 676,880 |
2022 | 621,613 |
2023 | 555,748 |
2024 | 513,416 |
Thereafter | 3,299,836 |
Total payments to be received | 6,708,823 |
Unconsolidated properties | |
Lessor, Lease, Description [Line Items] | |
Remaining 2019 | 95,575 |
2020 | 388,519 |
2021 | 395,558 |
2022 | 378,888 |
2023 | 352,418 |
2024 | 323,113 |
Thereafter | 1,909,299 |
Total payments to be received | $ 3,843,370 |
Debt and Preferred Equity Investments - Preferred Equity Investments (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Preferred equity investment | ||
Aggregate weighted average current yield (as a percent) | 8.89% | |
Carrying Value | $ 1,954,556 | $ 2,099,393 |
Preferred Equity, April 2021 | ||
Preferred equity investment | ||
Future Funding Obligations | 0 | |
Senior Financing | 272,000 | |
Carrying Value | 143,614 | 143,183 |
Preferred Equity, June 2022 | ||
Preferred equity investment | ||
Future Funding Obligations | 0 | |
Senior Financing | 1,763,271 | |
Carrying Value | $ 96,895 | 143,274 |
Preferred equity investments | ||
Preferred equity investment | ||
Aggregate weighted average current yield (as a percent) | 9.51% | |
Future Funding Obligations | $ 0 | |
Senior Financing | 2,035,271 | |
Carrying Value | $ 240,509 | $ 286,457 |
Segment Information - Additional Information (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2019
USD ($)
segment
|
Sep. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|||
Segment information | |||||||
Number of reportable segments (segment) | segment | 2 | ||||||
Total revenues | $ 313,634 | $ 307,545 | $ 930,913 | $ 910,356 | |||
Net income | 40,722 | 99,454 | 267,232 | 329,176 | |||
Total assets | [1] | 13,294,984 | 13,294,984 | $ 12,751,358 | |||
Marketing, general and administrative | 23,841 | 20,594 | 75,300 | 66,601 | |||
Operating Segments | Real Estate Segment | |||||||
Segment information | |||||||
Total revenues | 262,115 | 258,568 | 777,745 | 766,816 | |||
Net income | 6,133 | 62,199 | 168,639 | 224,246 | |||
Total assets | 11,216,682 | 11,216,682 | 10,481,594 | ||||
Operating Segments | Debt and Preferred Equity Segment | |||||||
Segment information | |||||||
Total revenues | 51,519 | 48,977 | 153,168 | 143,540 | |||
Net income | 34,589 | $ 37,255 | 98,593 | $ 104,930 | |||
Total assets | $ 2,078,302 | $ 2,078,302 | $ 2,269,764 | ||||
|
Accumulated Other Comprehensive (Loss) Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income (loss) | The following tables set forth the changes in accumulated other comprehensive (loss) income by component as of September 30, 2019 (in thousands):
(2) Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures in the respective consolidated statements of operations.
|
Noncontrolling Interests on the Company's Consolidated Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Noncontrolling Interest | Below is a summary of the activity relating to the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
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Schedule of Preferred Unit Activity | Below is a summary of the preferred units of limited partnership interest in the Operating Partnership as of September 30, 2019:
(8) Issued through a consolidated subsidiary. The units are convertible on a one-for-one basis, into the Series B Preferred Units of limited partnership interest, or the Subsidiary Series B Preferred Units. The Subsidiary Series B Preferred Units can be converted at any time, at the option of the unitholder, into a number of common stock equal to 6.71348 shares of common stock for each Subsidiary Series B Preferred Unit. As of September 30, 2019, no Subsidiary Series B Preferred Units have been issued. Below is a summary of the activity relating to the preferred units in the Operating Partnership for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
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Noncontrolling Interests on the Company's Consolidated Financial Statements |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interests on the Company's Consolidated Financial Statements | Noncontrolling Interests on the Company's Consolidated Financial Statements Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries. Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements. Common Units of Limited Partnership Interest in the Operating Partnership As of September 30, 2019 and December 31, 2018, the noncontrolling interest unit holders owned 4.96%, or 4,257,754 units, and 4.70%, or 4,130,579 units, of the Operating Partnership, respectively. As of September 30, 2019, 4,257,754 shares of our common stock were reserved for issuance upon the redemption of units of limited partnership interest of the Operating Partnership. Noncontrolling interests in the Operating Partnership is recorded at the greater of its cost basis or fair market value based on the closing stock price of our common stock at the end of the reporting period. Below is a summary of the activity relating to the noncontrolling interests in the Operating Partnership for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
Preferred Units of Limited Partnership Interest in the Operating Partnership Below is a summary of the preferred units of limited partnership interest in the Operating Partnership as of September 30, 2019:
Below is a summary of the activity relating to the preferred units in the Operating Partnership for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
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Accumulated Other Comprehensive (Loss) Income |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income | Stockholders’ Equity of the Company Common Stock Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2019, 81,515,066 shares of common stock and no shares of excess stock were issued and outstanding. Share Repurchase Program In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion of shares of our common stock. The Board of Directors has since authorized three separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, and fourth quarter of 2018, bringing the total program size to $2.5 billion. At September 30, 2019, repurchases executed under the program were as follows:
Perpetual Preferred Stock We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock, outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are entitled to redeem the Series I Preferred Stock at par for cash at our option. In August 2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I Preferred Units. Dividend Reinvestment and Stock Purchase Plan ("DRSPP") In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our common stock under the DRSPP. The DRSPP commenced on September 24, 2001. The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments and/or stock purchases under the DRSPP for the three and nine months ended September 30, 2019 and 2018, respectively (dollars in thousands):
Earnings per Share We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. SL Green's earnings per share for the three and nine months ended September 30, 2019 and 2018 are computed as follows (in thousands):
SL Green has excluded 1,317,803 and 1,266,296 common stock equivalents from the diluted shares outstanding for the three and nine months ended September 30, 2019, respectively, as they were anti-dilutive. SL Green has excluded 941,636 and 1,137,971 common stock equivalents from the diluted shares outstanding for the three and nine months ended September 30, 2018, respectively, as they were anti-dilutive. Accumulated Other Comprehensive (Loss) IncomeThe following tables set forth the changes in accumulated other comprehensive (loss) income by component as of September 30, 2019 (in thousands):
(2) Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures in the respective consolidated statements of operations.
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Consolidated Statement of Equity (Parenthetical) - $ / shares |
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Statement of Stockholders' Equity [Abstract] | ||||
Cash distribution declared, per common share (in dollars per share) | $ 0.85 | $ 0.8125 | $ 1.70 | $ 1.625 |
Debt and Preferred Equity Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt and preferred equity book balance roll forward | Below is a summary of the activity relating to our debt and preferred equity investments for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
(3) Certain participations in debt investments that were sold or syndicated, but did not meet the conditions for sale accounting, are included in other assets and other liabilities on the consolidated balance sheets.
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Allowance for Credit Losses on Financing Receivables | The following table is a rollforward of our total loan loss reserves for the nine months ended September 30, 2019 and the twelve months ended December 31, 2018 (in thousands):
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Summary of debt investments | As of September 30, 2019 and December 31, 2018, we held the following debt investments with an aggregate weighted average current yield of 8.89% at September 30, 2019 (dollars in thousands):
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Summary of preferred equity investments | As of September 30, 2019 and December 31, 2018, we held the following preferred equity investments with an aggregate weighted average current yield of 9.51% at September 30, 2019 (dollars in thousands):
(2) Represents contractual maturity, excluding any unexercised extension options.
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Organization and Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of commercial office properties | As of September 30, 2019, we owned the following interests in properties in the New York metropolitan area, primarily in midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:
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Consolidated Statements of Capital (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Cash distribution declared, per common share (in dollars per share) | $ 0.85 | $ 0.8125 | $ 1.70 | $ 1.625 |
SL Green Operating Partnership | ||||
Cash distribution declared, per common share (in dollars per share) | $ 0.85 | $ 0.8125 | $ 1.70 | $ 1.625 |
Property Acquisitions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Acquisitions | Property Acquisitions The following table summarizes the properties acquired during the nine months ended September 30, 2019:
(3) In May 2019, the Company acquired from our joint venture partner the remaining 10% interest in this property that the Company did not already own.
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Deferred Costs |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs | Deferred Costs Deferred costs at September 30, 2019 and December 31, 2018 consisted of the following (in thousands):
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Stockholders' Equity of the Company - Additional Information (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
$ / shares
shares
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Sep. 30, 2019
USD ($)
$ / shares
shares
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Jun. 30, 2019
$ / shares
shares
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Mar. 31, 2019
$ / shares
shares
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Sep. 30, 2019
USD ($)
increase
$ / shares
shares
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Dec. 31, 2018
USD ($)
$ / shares
shares
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Dec. 31, 2017
USD ($)
$ / shares
shares
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Jun. 30, 2018
USD ($)
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Aug. 31, 2016
USD ($)
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Equity, Class of Treasury Stock [Line Items] | |||||||||
Authorized capital stock (shares) | 260,000,000 | 260,000,000 | 260,000,000 | ||||||
Authorized shares, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 | 160,000,000 | 160,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Excess stock, shares authorized (shares) | 75,000,000 | 75,000,000 | 75,000,000 | ||||||
Excess stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares authorized (shares) | 25,000,000 | 25,000,000 | 25,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Excess shares issued (shares) | 0 | 0 | 0 | ||||||
Shares repurchased | 108,300 | 916,439 | 866,924 | 397,783 | 9,744,911 | 8,342,411 | |||
Average price paid per share (in dollars per share) | $ / shares | $ 81.31 | $ 86.58 | $ 86.07 | $ 96.22 | $ 101.64 | ||||
2016 Repurchase Program | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ | $ 500,000,000.0 | $ 500,000,000 | $ 500,000,000 | $ 1,000,000,000.0 | |||||
Number of increases to share repurchase program | increase | 3 | ||||||||
Shares repurchased | 20,268,468 | 19,352,029 | 18,485,105 | 18,087,322 | 8,342,411 | ||||
Stock repurchase program, authorized amount | $ | $ 2,500,000,000 | $ 2,500,000,000 | $ 2,500,000,000 |
Corporate Indebtedness - Schedule of Consolidated Interest Expense, Excluding Capitalized Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Interest expense | ||||
Interest expense before capitalized interest | $ 63,607 | $ 64,078 | $ 185,163 | $ 180,550 |
Interest on financing leases | 813 | 0 | 2,425 | 0 |
Interest capitalized | (15,700) | (8,504) | (38,228) | (22,785) |
Interest income | (608) | (406) | (3,563) | (1,070) |
Interest expense, net | $ 48,112 | $ 55,168 | $ 145,797 | $ 156,695 |
Stockholders' Equity of the Company - Schedule of Common Stock Issued and Proceeds Received Dividend Reinvestments (Details) - Dividend Reinvestment and Stock Purchase Plan (DRIP) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Stockholders' Equity | ||||
Issuance of common stock (in shares) | 490 | 509 | 3,485 | 1,183 |
Dividend reinvestments/stock purchases under the DRSPP | $ 39 | $ 52 | $ 303 | $ 116 |
Segment Information (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of selected results of operations and selected asset information | Selected consolidated results of operations for the three and nine months ended September 30, 2019 and 2018, and selected asset information as of September 30, 2019 and December 31, 2018, regarding our operating segments are as follows (in thousands):
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Significant Accounting Policies - Investment in Marketable Securities (Details) - USD ($) |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Investment in Marketable Securities | ||
Marketable securities | $ 30,208,000 | $ 28,638,000 |
Equity marketable securities | 30,208,000 | 28,638,000 |
Fair Value | ||
Investment in Marketable Securities | ||
Marketable securities | 30,208,000 | 28,638,000 |
Equity marketable securities | ||
Investment in Marketable Securities | ||
Equity marketable securities | 0 | 0 |
Commercial mortgage-backed securities | ||
Investment in Marketable Securities | ||
Marketable securities | 30,208,000 | 28,638,000 |
Cost basis of commercial mortgage-backed securities | $ 27,500,000 | $ 27,500,000 |
Properties Held for Sale and Property Dispositions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Properties Sold | The following table summarizes the properties sold during the nine months ended September 30, 2019:
(2) The Company sold a 49% interest, which resulted in the deconsolidation of our remaining 51% interest. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of $3.8 million, which is reflected in the Company's consolidated statements of operations within purchase price and other fair value adjustments. See Note 6, "Investments in Unconsolidated Joint Ventures."
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Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities, but where we are not the primary beneficiary, are accounted for under the equity method. See Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and transactions have been eliminated. We consolidate a VIE in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.
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Investment in Commercial Real Estate Properties | Investment in Commercial Real Estate Properties We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place leases. We depreciate the amount allocated to building (inclusive of tenant improvements) over their estimated useful lives, which generally range from three to 40 years. We amortize the amount allocated to the above- and below-market leases over the remaining term of the associated lease, which generally range from one to 14 years, and record it as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental income. We amortize the amount allocated to the values associated with in-place leases over the expected term of the associated lease, which generally ranges from one to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property. To the extent acquired leases contain fixed rate renewal options that are below-market and determined to be material, we amortize such below-market lease value into rental income over the renewal period. The Company classifies those leases under which the Company is the lessee at lease commencement as finance or operating leases. Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the asset. Leases that do not qualify as finance leases are deemed to be operating leases. At lease commencement the Company records a lease liability which is measured as the present value of the lease payments and a right of use asset which is measured as the amount of the lease liability and any initial direct costs incurred. The Company applies a discount rate to determine the present value of the lease payments. If the rate implicit in the lease is known, the Company uses that rate. If the rate implicit in the lease is not known, the Company uses a discount rate reflective of the Company’s collateralized borrowing rate given the term of the lease. To determine the discount rate, the Company employs a third party specialist to develop an analysis based primarily on the observable borrowing rates of the Company, other REITs, and other corporate borrowers with long-term borrowings. On the statements of operations, operating leases are expensed through operating lease rent while financing leases are expensed through amortization and interest expense. On the balance sheet, financing leases include the amounts previously captioned "Properties under capital lease." When applicable, the Company combines the consideration for lease and non-lease components in the calculation of the value of the lease obligation and right-of-use asset. On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the calculated fair value of the property. We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no longer recorded.
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Investment in Marketable Securities | Investment in Marketable Securities At acquisition, we designate a security as held-to-maturity, available-for-sale, or trading. As of September 30, 2019, we did not have any securities designated as held-to-maturity or trading. We account for our available-for-sale securities at fair value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. The cost of marketable securities sold and the amount reclassified out of accumulated other comprehensive income into earnings is determined using the specific identification method. Any unrealized losses that are determined to be other-than-temporary are recognized in earnings up to their credit component.
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Investments in Unconsolidated Joint Ventures | Investments in Unconsolidated Joint Ventures We assess our investments in unconsolidated joint ventures for recoverability and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint ventures' projected discounted cash flows.
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Deferred Lease Costs and Lease Classification | Deferred Lease Costs Deferred lease costs consist of incremental fees and direct costs that would not have been incurred if the lease had not been obtained and are amortized on a straight-line basis over the related lease term. Lease Classification Lease classification for leases under which the Company is the lessor is evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any value to the Company at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
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Revenue Recognition | Revenue Recognition Rental revenue for operating leases is recognized on a straight-line basis over the term of the lease. Rental revenue recognition commences when the leased space is substantially ready for its intended use. To determine whether the leased space is substantially ready for its intended use, management evaluates whether we are or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that we are the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which is when such tenant improvements are substantially complete. In certain instances, when management concludes that we are not the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space. When management concludes that we are the owner of tenant improvements for accounting purposes, we record amounts funded to construct the tenant improvements as a capital asset. For these tenant improvements, we record amounts reimbursed by tenants as a reduction of the capital asset. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, we record our contribution towards those improvements as a lease incentive, which is included in deferred costs, net on our consolidated balance sheets and amortized as a reduction to rental revenue on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rents receivable on the consolidated balance sheets. In addition to base rent, our tenants also generally will pay variable rent which represents their pro rata share of increases in real estate taxes and operating expenses for the building over a base year. In some leases, in lieu of paying additional rent based upon increases in building operating expenses, the tenant will pay additional rent based upon increases in the wage rate paid to porters over the porters' wage rate in effect during a base year or increases in the consumer price index over the index value in effect during a base year. In addition, many of our leases contain fixed percentage increases over the base rent to cover escalations. Electricity is most often supplied by the landlord either on a sub-metered basis, or rent inclusion basis (i.e., a fixed fee is included in the rent for electricity, which amount may increase based upon increases in electricity rates or increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and freight elevator service during business hours, and base building cleaning) are typically provided at no additional cost, with the tenant paying additional rent only for services which exceed base building services or for services which are provided outside normal business hours. These escalations are based on actual expenses incurred in the prior calendar year. If the expenses in the current year are different from those in the prior year, then during the current year, the escalations will be adjusted to reflect the actual expenses for the current year. Rental revenue is recognized if collectability is probable. If collectability of substantially all of the lease payments is assessed as not probable, any difference between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current-period adjustment to rental revenue. A subsequent change in the assessment of collectability to probable may result in a current-period adjustment to rental revenue for any difference between the rental revenue that would have been recognized if collectability had always been assessed as probable and the rental revenue recognized to date. The Company provides its tenants with certain customary services for lease contracts such as common area maintenance and general security. We have elected to combine the nonlease components with the lease components of our operating lease agreements and account for them as a single lease component in accordance with ASC 842. We record a gain on sale of real estate assets when we no longer hold a controlling financial interest in the entity holding the real estate, a contract exists with a third party and that third party has control of the assets acquired. Investment income on debt and preferred equity investments is accrued based on the contractual terms of the instruments and when, in the opinion of management, it is deemed collectible. Some debt and preferred equity investments provide for accrual of interest at specified rates, which differ from current payment terms. Interest is recognized on such loans at the accrual rate subject to management's determination that accrued interest is collectible. If management cannot make this determination, interest income above the current pay rate is recognized only upon actual receipt. Deferred origination fees, original issue discounts and loan origination costs, if any, are recognized as an adjustment to interest income over the terms of the related investments using the effective interest method. Fees received in connection with loan commitments are also deferred until the loan is funded and are then recognized over the term of the loan as an adjustment to yield. Discounts or premiums associated with the purchase of loans are amortized or accreted into interest income as a yield adjustment on the effective interest method based on expected cash flows through the expected maturity date of the related investment. If we purchase a debt or preferred equity investment at a discount, intend to hold it until maturity and expect to recover the full value of the investment, we accrete the discount into income as an adjustment to yield over the term of the investment. If we purchase a debt or preferred equity investment at a discount with the intention of foreclosing on the collateral, we do not accrete the discount. For debt investments acquired at a discount for credit quality, the difference between contractual cash flows and expected cash flows at acquisition is not accreted. Anticipated exit fees, the collection of which is expected, are also recognized over the term of the loan as an adjustment to yield. Debt and preferred equity investments are placed on a non-accrual status at the earlier of the date at which payments become 90 days past due or when, in the opinion of management, a full recovery of interest income becomes doubtful. Interest income recognition on any non-accrual debt or preferred equity investment is resumed when such non-accrual debt or preferred equity investment becomes contractually current and performance is demonstrated to be resumed. Interest is recorded as income on impaired loans only to the extent cash is received. We may syndicate a portion of the loans that we originate or sell the loans individually. When a transaction meets the criteria for sale accounting, we recognize gain or loss based on the difference between the sales price and the carrying value of the loan sold. Any related unamortized deferred origination fees, original issue discounts, loan origination costs, discounts or premiums at the time of sale are recognized as an adjustment to the gain or loss on sale, which is included in investment income on the consolidated statement of operations. Any fees received at the time of sale or syndication are recognized as part of investment income. Asset management fees are recognized on a straight-line basis over the term of the asset management agreement.
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Reserve for Possible Credit Losses | Allowance for Loan Loss and Other Investment Reserves The expense for loan loss and other investment reserves in connection with debt and preferred equity investments is the charge to earnings to adjust the allowance for possible losses to the level that we estimate to be adequate, based on Level 3 data, considering delinquencies, loss experience and collateral quality. The Company evaluates debt and preferred equity investments that are classified as held to maturity for possible impairment or credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor. Quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through “3,” from less risk to greater risk, which ratings are defined as follows: 1 - Low Risk Assets - Low probability of loss, 2 - Watch List Assets - Higher potential for loss, 3 - High Risk Assets - Loss more likely than not. When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired. A valuation allowance is measured based upon the excess of the carrying value of the investment over the fair value of the collateral. Any deficiency between the carrying value of an asset and the calculated value of the collateral is charged to expense. We continue to assess or adjust our estimates based on circumstances of a loan and the underlying collateral. If additional information reflects increased recovery of our investment, we will adjust our reserves accordingly. Debt and preferred equity investments that are classified as held for sale are carried at the lower of cost or fair market value using available market information obtained through consultation with dealers or other originators of such investments as well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its net carrying value to debt and preferred equity investments held to maturity. For these reclassified investments, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the investment.
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Income Taxes | Income Taxes SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, SL Green will be subject to Federal income tax on its taxable income at regular corporate rates. SL Green may also be subject to certain state, local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on its undistributed taxable income. The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated statements of operations relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating Partnership may also be subject to certain state, local and franchise taxes. We have elected, and may elect in the future, to treat certain of our corporate subsidiaries as taxable REIT subsidiaries, or TRSs. In general, TRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in Federal and state income tax liability for these entities. During the three and nine months ended September 30, 2019, we recorded a Federal, state and local tax benefit of $1.0 million and a provision of $0.5 million, respectively. During the three and nine months ended September 30, 2018, we recorded Federal, state and local tax provisions of $0.3 million and $2.0 million, respectively. We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited. On December 22, 2017, the Tax Cuts and Jobs Act (the ‘‘Tax Act’’) was signed into law and makes substantial changes to the Code.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments, debt and preferred equity investments and accounts receivable. We place our cash investments with high quality financial institutions. The collateral securing our debt and preferred equity investments is located in the New York metropolitan area. See Note 5, "Debt and Preferred Equity Investments." We perform ongoing credit evaluations of our tenants and require most tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value of a tenant's lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost revenue and the costs associated with re-tenanting a space.
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Reclassification | Reclassification Certain prior year balances have been reclassified to conform to our current year presentation.
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Accounting Standards Updates | Accounting Standards Updates In August 2018, the FASB issued Accounting Standard Update, or ASU, No. 2018-15, Intangibles - Goodwill and Other- Internal-Use Software (Topic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The amendments provide guidance on accounting for fees paid when the arrangement includes a software license and align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs to develop or obtain internal-use software. The guidance is effective for the Company for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company has not yet adopted this new guidance and does not expect it to have a material impact on the Company’s consolidated financial statements when the new standard is implemented. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This amendment removed, modified and added the disclosure requirements under Topic 820. The changes are effective for the Company for fiscal years beginning after December 15, 2019. Early adoption is permitted for the removed or modified disclosures with adoption of the additional disclosures upon the effective date. The Company has not yet adopted this new guidance and does not expect it to have a material impact on the Company’s consolidated financial statements when the new standard is implemented. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This amendment provides additional guidance related to share-based payment transactions for acquiring goods or services from nonemployees. The Company adopted this guidance on January 1, 2019 and it did not have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities; in July 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes; and in May 2019, issued ASU No. 2019-05, Codification Improvements. The amendments in the new standards will permit more flexibility in hedging interest rate risk for both variable rate and fixed rate financial instruments. The standards will also enhance the presentation of hedge results in the financial statements. The guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company adopted this guidance on January 1, 2019, and it did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; in November 2018 issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in April and May 2019, issued ASU No. 2019-04 and 2019-05, which provide codification improvements and targeted transition relief. The guidance changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current ‘incurred loss’ model with an ‘expected loss’ approach. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted after December 15, 2018. The Company’s DPE portfolio and financing lease assets will be subject to this guidance once the Company adopts it. ASU No. 2018-19 excludes operating lease receivables from the scope of this guidance. The Company continues to evaluate the impact of adopting this new accounting standard on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10 - Codification Improvements to Topic 842, Leases, and ASU No. 2018-11 - Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20 - Narrow-Scope Improvements for Lessors and in March 2019 issued ASU No. 2019-01 - Codification Improvements. The Company adopted this guidance on January 1, 2019 using the modified retrospective approach which allows the Company to apply the guidance for the current year presentation and not adjust the prior year numbers. The Company elected the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. The new guidance applies to the ground leases under which the Company is a lessee. The Company has recognized a new asset and liability - “Right of use asset - operating leases” and “Lease liability - operating leases” - for those leases classified as operating leases under the previous standard. The Company will continue to recognize expense on a straight-line basis for these operating leases. The ground leases that the Company historically reported as “Properties under capital leases” and “Capitalized lease obligations” are now labeled “Right of use asset - financing leases” and “Lease liability - financing leases”. The expense recognition of these leases has not changed. The Company adopted the practical expedient offered in ASU No. 2018-11 that allows lessors to not separate non-lease components from the related lease components under certain conditions. In doing so, the Company has collapsed the line “Escalation and reimbursement revenues” into the “Rental revenue, net” line to reflect adopting this practical expedient. The Company also collapsed the prior year balances to conform to the current year presentation. For future leases, the Company no longer capitalizes internal leasing costs that are not incremental as defined under the new guidance. The Company has recorded additional expense of approximately $2.2 million and $6.6 million related to this change for the three and nine months ended September 30, 2019, respectively.
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Fair Value Measurements | Fair Value Measurements We are required to disclose fair value information with regard to our financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We determine impairment in real estate investments and debt and preferred equity investments, including intangibles primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs. In May 2018, the Company was the successful bidder at the foreclosure of 2 Herald Square, at which time the Company's $250.5 million outstanding principal balance and $7.7 million accrued interest balance were credited to our equity investment in the property. We recorded the assets acquired and liabilities assumed at fair value. This resulted in the recognition of a fair value adjustment of $8.1 million, which is reflected on the Company's consolidated statements of operations within purchase price and other fair value adjustments. This fair value was determined by utilizing our successful bid at the foreclosure of the asset, the agreement to sell a partial interest in the property, and cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as a sales comparison approach, which utilizes comparable sales, listings and sales contracts, all of which are classified as Level 3 inputs. In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in the Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statements of operations. This fair value was determined using a third party valuation which primarily utilized cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs. Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model driven valuations using the significant inputs derived from or corroborated by observable market data. Marketable securities in an unrealized loss position are not considered to be other than temporarily impaired. We do not intend to sell these securities and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases. The fair value of derivative instruments is based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs. The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to their present value using adjusted market interest rates, which is provided by a third-party specialist.
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Mortgages and other loans payable | Mortgages and Other Loans Payable The first mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt investments at September 30, 2019 and December 31, 2018, respectively, were as follows (dollars in thousands):
At September 30, 2019 and December 31, 2018, the gross book value of the properties and debt and preferred equity investments collateralizing the mortgages and other loans payable was approximately $3.7 billion and $2.6 billion, respectively. Federal Home Loan Bank of New York Facility The Company's wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a Vermont licensed captive insurance company, is a member of the Federal Home Loan Bank of New York, or FHLBNY. As a member, Ticonderoga may borrow funds from the FHLBNY in the form of secured advances. As of September 30, 2019, we had $14.5 million, $10.0 million and $15.0 million in outstanding secured advances with a borrowing rate of 30-day LIBOR plus 18 basis points, 30-day LIBOR plus 26 basis points and 30-day LIBOR plus 32 basis points, respectively. Master Repurchase Agreement The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with potential margin calls is further mitigated by our ability to recollateralize the facility with additional assets from our portfolio of debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity through the 2017 credit facility, as defined below. The 2017 MRA has a maximum facility capacity of $300.0 million. In April 2018, we increased the maximum facility capacity to $400.0 million. The facility bears interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate. In June 2018, we exercised a one year extension option and in June 2019, we exercised another one year extension option. In August 2019, we amended our agreement to include two additional one year extension options. At September 30, 2019, the facility had a carrying value of $189.6 million, net of deferred financing costs. Corporate Indebtedness2017 Credit Facility In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was originally entered into by the Company in November 2012, or the 2012 credit facility. As of September 30, 2019, the 2017 credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024, respectively. The revolving credit facility has two six-month as-of-right extension options to March 31, 2023. We also have an option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions. As of September 30, 2019, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5 basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans under Term Loan A, and (iii) 150 basis points to 245 basis points for loans under Term Loan B, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of the Company. In May 2019, we entered into an agreement to reduce the interest rate spread under Term Loan B by 65 basis points to a spread over 30-day LIBOR ranging from 85 basis points to 165 basis points. This reduction will be effective in November 2019. At September 30, 2019, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for Term Loan A, and 165 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long term indebtedness of the Company. As of September 30, 2019, the facility fee was 20 basis points. As of September 30, 2019, we had $11.8 million of outstanding letters of credit, $335.0 million drawn under the revolving credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.2 billion under the 2017 credit facility. At September 30, 2019 and December 31, 2018, the revolving credit facility had a carrying value of $328.5 million and $492.2 million, respectively, net of deferred financing costs. At September 30, 2019 and December 31, 2018, the term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs. The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility. The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below). Senior Unsecured Notes The following table sets forth our senior unsecured notes and other related disclosures as of September 30, 2019 and December 31, 2018, respectively, by scheduled maturity date (amounts in thousands):
Restrictive Covenants The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of September 30, 2019 and December 31, 2018, we were in compliance with all such covenants. Junior Subordinated Deferrable Interest Debentures In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense. Principal Maturities Combined aggregate principal maturities of mortgages and other loans payable, 2017 credit facility, trust preferred securities, senior unsecured notes and our share of joint venture debt as of September 30, 2019, including as-of-right extension options and put options, were as follows (in thousands):
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
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Properties Held for Sale and Property Dispositions |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Properties Held for Sale and Property Dispositions | Properties Held for Sale and Property Dispositions Properties Held for Sale During the three months ended September 30, 2019, we entered into agreements to sell 220 East 42nd Street in Manhattan and 1010 Washington Boulevard in Stamford, Connecticut for total consideration of $815.0 million and $23.1 million, respectively. The sale of 1010 Washington Boulevard closed in November. The sale of 220 East 42nd Street is expected to close in the first quarter of 2020. As of September 30, 2019, 220 East 42nd Street and 1010 Washington Boulevard were classified as held for sale. During the third quarter of 2019, the Company recorded a charge of $7.0 million in connection with the reclassification of 1010 Washington Boulevard to held for sale. This charge is included in depreciable real estate reserves and impairment in the consolidated statements of operations. Property Dispositions The following table summarizes the properties sold during the nine months ended September 30, 2019:
(2) The Company sold a 49% interest, which resulted in the deconsolidation of our remaining 51% interest. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of $3.8 million, which is reflected in the Company's consolidated statements of operations within purchase price and other fair value adjustments. See Note 6, "Investments in Unconsolidated Joint Ventures."
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Deferred Costs (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred leasing costs | $ 445,489 | $ 453,833 |
Less: accumulated amortization | (262,868) | (244,723) |
Deferred costs, net | $ 182,621 | $ 209,110 |
Stockholders' Equity of the Company - Perpetual Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 9 Months Ended | ||
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Aug. 31, 2012 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Feb. 28, 2018 |
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Stockholders' Equity | ||||
Common stock, shares authorized (in shares) | 160,000,000 | 160,000,000 | ||
Series I Preferred Stock | ||||
Stockholders' Equity | ||||
Preferred stock, shares outstanding (in shares) | 9,200,000 | 9,200,000 | ||
Dividend rate preferred units (as a percent) | 6.50% | |||
Perpetual preferred stock, liquidation preference (in dollars per share) | $ 25.00 | $ 25.00 | ||
Perpetual preferred stock, annual dividends per share (in dollars per share) | $ 1.625 | |||
Contributions of net proceeds from sale of preferred stock | $ 221.9 | |||
Dividend Reinvestment and Stock Purchase Plan (DRIP) | ||||
Stockholders' Equity | ||||
Common stock, shares authorized (in shares) | 3,500,000 |
Noncontrolling Interests on the Company's Consolidated Financial Statements - Common Unit Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
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Sep. 30, 2019 |
Jun. 30, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Rollforward Analysis of Preferred Unit Activity | ||||
Redemption of preferred units | $ (54) | $ (25,791) | ||
SL Green Operating Partnership | ||||
Rollforward Analysis of Preferred Unit Activity | ||||
Issuance of preferred units | $ 16,493 | $ 23,655 | ||
Redemption of preferred units | (54) | (25,791) | (16,388) | (60,718) |
SL Green Operating Partnership | Preferred Units | ||||
Rollforward Analysis of Preferred Unit Activity | ||||
Balance at beginning of period | $ 300,427 | 300,427 | 301,735 | |
Issuance of preferred units | 1,000 | 0 | ||
Redemption of preferred units | (15,142) | (1,308) | ||
Balance at end of period | $ 286,285 | $ 286,285 | $ 300,427 |
Organization and Basis of Presentation - Additional Information (Details) |
9 Months Ended | |
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Sep. 30, 2019 |
Dec. 31, 2018 |
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Service Corporation | ||
Organization | ||
Percentage of ownership in SL Green Management LLC owned by operating partnership (percent) | 95.00% | |
SL Green Management LLC | ||
Organization | ||
Percentage of ownership in SL Green Management LLC owned by operating partnership (percent) | 100.00% | |
SL Green Operating Partnership | ||
Organization | ||
Noncontrolling interest in the operating partnership (as a percent) | 4.96% | 4.70% |
Significant Accounting Policies - Revenue Recognition/Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Income taxes | ||||
Federal, state and local tax provision | $ 1.0 | $ 0.3 | $ 0.5 | $ 2.0 |
Rental Income - Future Minimum Rental Payments prior to Adoption (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
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Consolidated properties | |
Property Subject to or Available for Operating Lease [Line Items] | |
2019 | $ 830,336 |
2020 | 765,610 |
2021 | 625,956 |
2022 | 562,250 |
2023 | 500,499 |
Thereafter | 3,272,014 |
Total future minimum payments receivable | 6,556,665 |
Unconsolidated properties | |
Property Subject to or Available for Operating Lease [Line Items] | |
2019 | 348,060 |
2020 | 375,228 |
2021 | 380,886 |
2022 | 348,222 |
2023 | 333,501 |
Thereafter | 2,098,995 |
Total future minimum payments receivable | $ 3,884,892 |
Debt and Preferred Equity Investments - Rollforward of Net Book Balance (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
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SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 2,099,393 | $ 2,114,041 |
Redemptions/Sales/Syndications/Amortization | (733,592) | (994,906) |
Net change in loan loss reserves | 4,000 | (5,750) |
Balance at end of period | 1,954,556 | 2,099,393 |
Debt Investments in Mortgage Loans | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | ||
Originations/Accretion | 573,786 | 834,304 |
Preferred equity investments | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | ||
Originations/Accretion | $ 10,969 | $ 151,704 |
Share-based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average assumptions used to estimate the grant date fair value of options granted | The fair value of each stock option or LTIP Unit granted is estimated on the date of grant using the Black-Scholes option pricing model based on historical information with the following weighted average assumptions for grants during the year ended December 31, 2018. There were no grants during the nine months ended September 30, 2019.
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Summary of the status of stock options and changes during the period | A summary of the status of the Company's stock options as of September 30, 2019 and December 31, 2018, and changes during the nine months ended September 30, 2019 and year ended December 31, 2018 are as follows:
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Summary of restricted stock and charges during the period | A summary of the Company's restricted stock as of September 30, 2019 and December 31, 2018 and charges during the nine months ended September 30, 2019 and the year ended December 31, 2018, are as follows:
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amounts due from/to related parties | Amounts due from joint ventures and related parties at September 30, 2019 and December 31, 2018 consisted of the following (in thousands):
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Stockholders' Equity of the Company |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity of the Company | Stockholders’ Equity of the Company Common Stock Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2019, 81,515,066 shares of common stock and no shares of excess stock were issued and outstanding. Share Repurchase Program In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion of shares of our common stock. The Board of Directors has since authorized three separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, and fourth quarter of 2018, bringing the total program size to $2.5 billion. At September 30, 2019, repurchases executed under the program were as follows:
Perpetual Preferred Stock We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock, outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are entitled to redeem the Series I Preferred Stock at par for cash at our option. In August 2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I Preferred Units. Dividend Reinvestment and Stock Purchase Plan ("DRSPP") In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our common stock under the DRSPP. The DRSPP commenced on September 24, 2001. The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments and/or stock purchases under the DRSPP for the three and nine months ended September 30, 2019 and 2018, respectively (dollars in thousands):
Earnings per Share We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. SL Green's earnings per share for the three and nine months ended September 30, 2019 and 2018 are computed as follows (in thousands):
SL Green has excluded 1,317,803 and 1,266,296 common stock equivalents from the diluted shares outstanding for the three and nine months ended September 30, 2019, respectively, as they were anti-dilutive. SL Green has excluded 941,636 and 1,137,971 common stock equivalents from the diluted shares outstanding for the three and nine months ended September 30, 2018, respectively, as they were anti-dilutive. Accumulated Other Comprehensive (Loss) IncomeThe following tables set forth the changes in accumulated other comprehensive (loss) income by component as of September 30, 2019 (in thousands):
(2) Amount reclassified from accumulated other comprehensive (loss) income is included in equity in net (loss) income from unconsolidated joint ventures in the respective consolidated statements of operations.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We are required to disclose fair value information with regard to our financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The following tables set forth the assets and liabilities that we measure at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at September 30, 2019 and December 31, 2018 (in thousands):
We determine impairment in real estate investments and debt and preferred equity investments, including intangibles primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs. In May 2018, the Company was the successful bidder at the foreclosure of 2 Herald Square, at which time the Company's $250.5 million outstanding principal balance and $7.7 million accrued interest balance were credited to our equity investment in the property. We recorded the assets acquired and liabilities assumed at fair value. This resulted in the recognition of a fair value adjustment of $8.1 million, which is reflected on the Company's consolidated statements of operations within purchase price and other fair value adjustments. This fair value was determined by utilizing our successful bid at the foreclosure of the asset, the agreement to sell a partial interest in the property, and cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as a sales comparison approach, which utilizes comparable sales, listings and sales contracts, all of which are classified as Level 3 inputs. In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in the Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statements of operations. This fair value was determined using a third party valuation which primarily utilized cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs. Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model driven valuations using the significant inputs derived from or corroborated by observable market data. Marketable securities in an unrealized loss position are not considered to be other than temporarily impaired. We do not intend to sell these securities and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases. The fair value of derivative instruments is based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs. The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to their present value using adjusted market interest rates, which is provided by a third-party specialist. The following table provides the carrying value and fair value of these financial instruments as of September 30, 2019 and December 31, 2018 (in thousands):
Disclosure about fair value of financial instruments was based on pertinent information available to us as of September 30, 2019 and December 31, 2018. Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.
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Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Operating expenses, paid to related parties | $ 5,460 | $ 4,790 | $ 13,575 | $ 13,289 |
SL Green Operating Partnership | ||||
Operating expenses, paid to related parties | $ 5,460 | $ 4,790 | $ 13,575 | $ 13,289 |
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