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SL GREEN REALTY CORP - Quarter Report: 2023 September (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to                
Commission File Number: 1-13199 (SL Green Realty Corp.)
Commission File Number: 33-167793-02 (SL Green Operating Partnership, L.P.)
______________________________________________________________________
SL GREEN REALTY CORP.
SL GREEN OPERATING PARTNERSHIP, L.P.
(Exact name of registrant as specified in its charter)
______________________________________________________________________
SL Green Realty Corp.Maryland13-3956775
SL Green Operating Partnership, L.P.Delaware13-3960938
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Vanderbilt Avenue, New York, NY 10017
(Address of principal executive offices—Zip Code)

(212) 594-2700
(Registrant's telephone number, including area code)
______________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
SL Green Realty Corp.    Yes x    No o            SL Green Operating Partnership, L.P.    Yes x    No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
SL Green Realty Corp.     Yes x    No o            SL Green Operating Partnership, L.P.    Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
SL Green Realty Corp.
Large accelerated filerxAccelerated filer
Non-accelerated filer
Smaller Reporting CompanyEmerging 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.
SL Green Operating Partnership, L.P.
Large accelerated filerAccelerated filer
Non-accelerated filerx
Smaller Reporting CompanyEmerging 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 
SL Green Realty Corp.    Yes     No x            SL Green Operating Partnership, L.P.    Yes     No x
Securities registered pursuant to Section 12(b) of the Act:
RegistrantTrading SymbolTitle of Each ClassName of Each Exchange on Which Registered
SL Green Realty Corp.SLGCommon Stock, $0.01 par valueNew York Stock Exchange
SL Green Realty Corp.SLG.PRI6.500% Series I Cumulative Redeemable Preferred Stock, $0.01 par valueNew York Stock Exchange
As of November 2, 2023, 64,416,699 shares of SL Green Realty Corp.'s common stock, par value $0.01 per share, were outstanding. As of November 2, 2023, 306,808 common units of limited partnership interest of SL Green Operating Partnership, L.P. were held by non-affiliates. There is no established trading market for such units.




EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2023 of SL Green Realty Corp. and SL Green Operating Partnership, L.P. Unless stated otherwise or the context otherwise requires, references to "SL Green Realty Corp.," the "Company" or "SL Green" mean SL Green Realty Corp. and its consolidated subsidiaries, including SL Green Operating Partnership, L.P.; and references to "SL Green Operating Partnership, L.P.," the "Operating Partnership" or "SLGOP" mean SL Green Operating Partnership, L.P. and its consolidated subsidiaries. The terms "we," "our" and "us" mean the Company and all the entities owned or controlled by the Company, including the Operating Partnership.
The Company is a Maryland corporation which operates as a self-administered and self-managed real estate investment trust, or REIT, and is the sole managing general partner of the Operating Partnership. As a general partner of the Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.
As of September 30, 2023, the Company owns 93.96% of the outstanding general and limited partnership interest in the Operating Partnership and owns 9,200,000 Series I Preferred Units of the Operating Partnership. As of September 30, 2023, noncontrolling investors held, in aggregate, a 6.04% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership.
The Company and the Operating Partnership are managed and operated as one entity. The financial results of the Operating Partnership are consolidated into the financial statements of the Company. The Company has no significant assets other than its investment in the Operating Partnership. Substantially all of our assets are held by, and our operations are conducted through, the Operating Partnership. Therefore, the assets and liabilities of the Company and the Operating Partnership are substantially the same.
Noncontrolling interests in the Operating Partnership, stockholders' equity of the Company and partners' capital of the Operating Partnership are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The common limited partnership interests in the Operating Partnership not owned by the Company are accounted as noncontrolling interests, within mezzanine equity, in the Company's and the Operating Partnership's consolidated financial statements.
We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:
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.
To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:
consolidated financial statements; and
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; and
Note 13, Partners' Capital of the Operating Partnership.
This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership, respectively, in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Company, in both their capacity as the principal executive officer and principal financial officer of the Company and the principal executive officer and principal financial officer of the general partner of the Operating Partnership, have made the requisite certifications and that the Company and the Operating Partnership are compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.



SL GREEN REALTY CORP. AND SL GREEN OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION 
Item 1.FINANCIAL STATEMENTS
FINANCIAL STATEMENTS OF SL GREEN REALTY CORP.
Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022
Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)
FINANCIAL STATEMENTS OF SL GREEN OPERATING PARTNERSHIP, L.P.
Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022
Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Capital for the three and nine months ended September 30, 2023 and 2022 (unaudited)
Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (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


Table of Contents


SL GREEN REALTY CORP. AND SL GREEN OPERATING PARTNERSHIP, L.P.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands)
September 30, 2023December 31, 2022
(unaudited)
Assets
Commercial real estate properties, at cost:
Land and land interests
$1,090,370 $1,576,927 
Building and improvements
3,605,247 4,903,776 
Building leasehold and improvements
1,343,386 1,691,831 
Right of use asset - operating leases953,236 1,026,265 
6,992,239 9,198,799 
Less: accumulated depreciation
(1,997,942)(2,039,554)
4,994,297 7,159,245 
Cash and cash equivalents189,750 203,273 
Restricted cash119,573 180,781 
Investments in marketable securities9,616 11,240 
Tenant and other receivables37,295 34,497 
Related party receivables9,723 27,352 
Deferred rents receivable262,808 257,887 
Debt and preferred equity investments, net of discounts and deferred origination fees of $1,638 and $1,811 and allowances of $13,520 and $6,630 in 2023 and 2022, respectively
334,327 623,280 
Investments in unconsolidated joint ventures3,152,752 3,190,137 
Deferred costs, net108,370 121,157 
Other assets472,071 546,945 
Total assets (1)
$9,690,582 $12,355,794 
Liabilities
Mortgages and other loans payable, net$1,512,746 $3,227,563 
Revolving credit facility, net394,368 443,217 
Unsecured term loans, net1,243,649 1,641,552 
Unsecured notes, net99,769 99,692 
Accrued interest payable17,934 14,227 
Other liabilities453,349 236,211 
Accounts payable and accrued expenses146,332 154,867 
Deferred revenue136,063 272,248 
Lease liability - financing leases105,198 104,218 
Lease liability - operating leases887,412 895,100 
Dividend and distributions payable21,725 21,569 
Security deposits50,071 50,472 
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities100,000 100,000 
Total liabilities (1)
5,168,616 7,260,936 
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SL Green Realty Corp.
Consolidated Balance Sheets
(in thousands)
September 30, 2023December 31, 2022
(unaudited)
Commitments and contingencies
Noncontrolling interests in Operating Partnership248,222 269,993 
Preferred units166,501 177,943 
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, 2023 and December 31, 2022
221,932 221,932 
Common stock, $0.01 par value, 160,000 shares authorized and 65,458 and 65,440 issued and outstanding at September 30, 2023 and December 31, 2022, respectively (including 1,060 and 1,060 shares held in treasury at September 30, 2023 and December 31, 2022, respectively)
656 656 
Additional paid-in-capital3,813,758 3,790,358 
Treasury stock at cost(128,655)(128,655)
Accumulated other comprehensive income69,616 49,604 
Retained earnings62,406 651,138 
Total SL Green stockholders' equity4,039,713 4,585,033 
Noncontrolling interests in other partnerships67,530 61,889 
Total equity4,107,243 4,646,922 
Total liabilities and equity$9,690,582 $12,355,794 
(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: $41.2 million and $41.2 million of land, $39.8 million and $41.0 million of building and improvements, $— million and $— million of building and leasehold improvements, $— million and $— million of right of use assets, $5.2 million and $4.4 million of accumulated depreciation, $664.1 million and $599.2 million of other assets included in other line items, $50.0 million and $49.8 million of real estate debt, net, $0.0 million and $0.2 million of accrued interest payable, $— million and $— million of lease liabilities, and $304.7 million and $146.4 million of other liabilities included in other line items as of September 30, 2023 and December 31, 2022, respectively.


The accompanying notes are an integral part of these consolidated financial statements.
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SL Green Realty Corp.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)

Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenues
Rental revenue, net$150,991 $162,952 $531,978 $474,215 
Investment income9,689 29,513 27,849 69,808 
Other income12,540 19,991 58,038 57,842 
Total revenues173,220 212,456 617,865 601,865 
Expenses
Operating expenses, including related party expenses of $2 and $3 in 2023, and $0 and $5,695 in 2022
49,585 45,011 148,606 127,151 
Real estate taxes31,195 35,111 112,463 96,677 
Operating lease rent7,253 7,388 20,209 20,429 
Interest expense, net of interest income27,440 21,824 109,714 51,854 
Amortization of deferred financing costs2,152 2,043 6,327 5,908 
Depreciation and amortization50,212 48,462 197,844 142,359 
Loan loss and other investment reserves, net of recoveries — 6,890 — 
Transaction related costs166 292 1,083 321 
Marketing, general and administrative22,873 21,276 69,132 69,574 
Total expenses190,876 181,407 672,268 514,273 
Equity in net loss from unconsolidated joint ventures(15,126)(21,997)(44,470)(31,262)
Equity in net loss on sale of interest in unconsolidated joint venture/real estate — (79)(131)
Purchase price and other fair value adjustments10,183 (1,117)(6,987)(7,348)
Gain (loss) on sale of real estate, net516 4,276 (27,813)(61,104)
Depreciable real estate reserves and impairment389 — (305,527)— 
Net (loss) income(21,694)12,211 (439,279)(12,253)
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interests in the Operating Partnership1,574 (491)27,493 1,831 
Noncontrolling interests in other partnerships1,794 993 4,459 (2,269)
Preferred units distributions(1,903)(1,598)(5,352)(4,844)
Net (loss) income attributable to SL Green(20,229)11,115 (412,679)(17,535)
Perpetual preferred stock dividends(3,738)(3,738)(11,213)(11,213)
Net (loss) income attributable to SL Green common stockholders$(23,967)$7,377 $(423,892)$(28,748)
Basic (loss) earnings per share$(0.38)$0.11 $(6.63)$(0.47)
Diluted (loss) earnings per share$(0.38)$0.11 $(6.63)$(0.47)
Basic weighted average common shares outstanding64,114 63,949 64,099 63,971 
Diluted weighted average common shares and common share equivalents outstanding 68,296 68,897 68,274 69,249 
    
The accompanying notes are an integral part of these consolidated financial statements.
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SL Green Realty Corp.
Consolidated Statements of Comprehensive (Loss) Income
(unaudited, in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net (loss) income$(21,694)$12,211 $(439,279)$(12,253)
Other comprehensive income:
Increase in unrealized value of derivative instruments, including SL Green's share of joint venture derivative instruments12,799 50,488 23,062 111,378 
(Decrease) increase in unrealized value of marketable securities(181)1,605 (1,625)(642)
Other comprehensive income12,618 52,093 21,437 110,736 
Comprehensive (loss) income(9,076)64,304 (417,842)98,483 
Net loss (income) attributable to noncontrolling interests and preferred units distributions1,465 (1,096)26,600 (5,282)
Other comprehensive income attributable to noncontrolling interests(771)(3,114)(1,425)(6,404)
Comprehensive (loss) income attributable to SL Green$(8,382)$60,094 $(392,667)$86,797 


The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Realty Corp.
Consolidated Statements of Equity
(unaudited, in thousands, except per share data)
SL Green Realty Corp. Stockholders
 Common Stock
Series I
Preferred
Stock
SharesPar
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
Total
Balance at June 30, 2023$221,932 64,387 $656 $3,805,704 $(128,655)$57,769 $135,518 $66,909 $4,159,833 
Net loss(20,229)(1,794)(22,023)
Other comprehensive income11,847 11,847 
Preferred dividends (3,738)(3,738)
DRSPP proceeds97 97 
Reallocation of noncontrolling interest in the Operating Partnership3,126 3,126 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings7,957 7,957 
Contributions to consolidated joint venture interests3,266 3,266 
Cash distributions to noncontrolling interests(851)(851)
Cash distributions declared ($0.812 per common share, none of which represented a return of capital for federal income tax purposes)
(52,271)(52,271)
Balance at September 30, 2023$221,932 64,398 $656 $3,813,758 $(128,655)$69,616 $62,406 $67,530 $4,107,243 
SL Green Realty Corp. Stockholders
Common Stock
Series I
Preferred
Stock
SharesPar
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
Total
Balance at June 30, 2022$221,932 64,302 $655 $3,801,272 $(128,655)$8,595 $779,999 $64,966 $4,748,764 
Net income11,115 (993)10,122 
Acquisition of subsidiary interest from noncontrolling interest(29,742)(75)(29,817)
Other comprehensive income48,979 48,979 
Preferred dividends (3,738)(3,738)
DRSPP proceeds140 140 
Reallocation of noncontrolling interest in the Operating Partnership28,624 28,624 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings11 8,616 8,616 
Contributions to consolidated joint venture interests817 817 
Cash distributions to noncontrolling interests(148)(148)
Cash distributions declared ($0.932 per common share, none of which represented a return of capital for federal income tax purposes)
(60,138)(60,138)
Balance at September 30, 2022$221,932 64,316 $655 $3,780,286 $(128,655)$57,574 $755,862 $64,567 $4,752,221 
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SL Green Realty Corp.
Consolidated Statements of Equity
(unaudited, in thousands, except per share data)
SL Green Realty Corp. Stockholders 
Common Stock
Series I
Preferred
Stock
SharesPar
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
Total
Balance at December 31, 2022$221,932 64,380 $656 $3,790,358 $(128,655)$49,604 $651,138 $61,889 $4,646,922 
Net loss(412,679)(4,459)(417,138)
Other comprehensive income20,012 20,012 
Preferred dividends (11,213)(11,213)
DRSPP proceeds15 439 439 
Reallocation of noncontrolling interest in the Operating Partnership(8,072)(8,072)
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings22,961 22,961 
Contributions to consolidated joint venture interests11,714 11,714 
Cash distributions to noncontrolling interests(1,614)(1,614)
Cash distributions declared ($2.437 per common share, none of which represented a return of capital for federal income tax purposes)
(156,768)(156,768)
Balance at September 30, 2023$221,932 64,398 $656 $3,813,758 $(128,655)$69,616 $62,406 $67,530 $4,107,243 
SL Green Realty Corp. Stockholders
Common Stock
Series I
Preferred
Stock
SharesPar
Value
Additional
Paid-
In-Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
Total
Balance at December 31, 2021$221,932 64,105 $672 $3,739,409 $(126,160)$(46,758)$975,781 $13,377 $4,778,253 
Net loss(17,535)2,269 (15,266)
Acquisition of subsidiary interest from noncontrolling interest(29,742)(75)(29,817)
Other comprehensive income104,332 104,332 
Preferred dividends (11,213)(11,213)
DRSPP proceeds339 339 
Reallocation of noncontrolling interest in the Operating Partnership23,539 23,539 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings215 22,144 22,147 
Repurchases of common stock(1,971)(20)(114,979)(36,198)(151,197)
Contributions to consolidated joint venture interests52,164 52,164 
Cash distributions to noncontrolling interests(3,168)(3,168)
Issuance of special dividend paid primarily in stock1,961 163,115 (2,495)160,620 
Cash distributions declared ($2.797 per common share, none of which represented a return of capital for federal income tax purposes)
(178,512)(178,512)
Balance at September 30, 2022$221,932 64,316 $655 $3,780,286 $(128,655)$57,574 $755,862 $64,567 $4,752,221 

The accompanying notes are an integral part of these consolidated financial statements.
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SL Green Realty Corp.
Consolidated Statements of Cash Flows
(unaudited, in thousands, except per share data)
Nine Months Ended September 30,
20232022
Operating Activities
Net loss$(439,279)$(12,253)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization204,171 148,267 
Equity in net loss from unconsolidated joint ventures44,470 31,262 
Distributions of cumulative earnings from unconsolidated joint ventures514 448 
Equity in net loss on sale of interest in unconsolidated joint venture interest/real estate79 131 
Purchase price and other fair value adjustments6,987 7,348 
Depreciable real estate reserves and impairment305,527 — 
Loss on sale of real estate, net27,813 61,104 
Loan loss reserves and other investment reserves, net of recoveries6,890 — 
Deferred rents receivable(16,195)(1,371)
Non-cash lease expense15,477 17,332 
Other non-cash adjustments 6,645 (11,950)
Changes in operating assets and liabilities:
Tenant and other receivables(2,852)7,800 
Related party receivables16,466 5,803 
Deferred lease costs(8,066)(10,227)
Other assets(13,254)(35,114)
Accounts payable, accrued expenses, other liabilities and security deposits23,655 21,345 
Deferred revenue9,978 17,208 
Lease liability - operating leases(7,688)2,495 
Net cash provided by operating activities181,338 249,628 
Investing Activities
Acquisitions of real estate property (64,491)
Additions to land, buildings and improvements(194,035)(194,997)
Acquisition deposits and deferred purchase price 75,400 
Investments in unconsolidated joint ventures(119,522)(146,598)
Distributions in excess of cumulative earnings from unconsolidated joint ventures108,884 92,217 
Net proceeds from disposition of real estate/joint venture interest547,605 353,853 
Cash and restricted cash assumed from acquisition of real estate investment 60,494 
Proceeds from sale or redemption of marketable securities 11,465 
Other investments(17,545)1,619 
Origination of debt and preferred equity investments(53,703)(40,053)
Repayments or redemption of debt and preferred equity investments 124,405 
Net cash provided by investing activities271,684 273,314 
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SL Green Realty Corp.
Consolidated Statements of Cash Flows
(unaudited, in thousands, except per share data)
Nine Months Ended September 30,
20232022
Financing Activities
Proceeds from mortgages and other loans payable 381,980 
Repayments of mortgages and other loans payable(4,340)(290,936)
Proceeds from revolving credit facility, term loans and unsecured notes358,000 1,124,000 
Repayments of revolving credit facility, term loans and unsecured notes(808,000)(1,364,000)
Proceeds from stock options exercised and DRSPP issuance439 339 
Repurchase of common stock (151,197)
Redemption of preferred stock(11,700)(17,967)
Redemption of OP units(8,900)(35,316)
Distributions to noncontrolling interests in other partnerships(1,614)(3,168)
Contributions from noncontrolling interests in other partnerships3,580 52,164 
Acquisition of subsidiary interest from noncontrolling interest (29,817)
Distributions to noncontrolling interests in the Operating Partnership(11,225)(12,635)
Dividends paid on common and preferred stock(172,920)(197,124)
Other obligations related to secured borrowing129,656 77,874 
Tax withholdings related to restricted share awards (3,915)
Deferred loan costs(729)(5,130)
Net cash used in financing activities(527,753)(474,848)
Net (decrease) increase in cash, cash equivalents, and restricted cash(74,731)48,094 
Cash, cash equivalents, and restricted cash at beginning of year384,054 336,984 
Cash, cash equivalents, and restricted cash at end of period$309,323 $385,078 
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Exchange of preferred equity investment for real estate or equity in joint venture$ $190,652 
Exchange of debt investment for real estate or equity in joint venture349,946 193,995 
Assumption of mortgage and mezzanine loans 1,712,750 
Issuance of special dividend paid primarily in stock 160,620 
Tenant improvements and capital expenditures payable 18,518 
Fair value adjustment to noncontrolling interest in the Operating Partnership8,072 23,539 
Deconsolidation of a subsidiary101,351 — 
Contribution to consolidated joint venture interest8,134 — 
Debt and preferred equity investments 302 
Removal of fully depreciated commercial real estate properties7,747 4,048 
Recognition of right of use assets and related lease liabilities 57,938 
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SL Green Realty Corp.
Consolidated Statements of Cash Flows
(unaudited, in thousands, except per share data)
    The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Nine Months Ended September 30,
 20232022
Cash and cash equivalents$189,750 $201,267 
Restricted cash119,573 183,811 
Total cash, cash equivalents, and restricted cash$309,323 $385,078 
The accompanying notes are an integral part of these consolidated financial statements.
13

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SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands)

September 30, 2023December 31, 2022
(unaudited)
Assets  
Commercial real estate properties, at cost:  
Land and land interests
$1,090,370 $1,576,927 
Building and improvements
3,605,247 4,903,776 
Building leasehold and improvements
1,343,386 1,691,831 
Right of use asset - operating leases953,236 1,026,265 
6,992,239 9,198,799 
Less: accumulated depreciation
(1,997,942)(2,039,554)
4,994,297 7,159,245 
Cash and cash equivalents189,750 203,273 
Restricted cash119,573 180,781 
Investments in marketable securities9,616 11,240 
Tenant and other receivables37,295 34,497 
Related party receivables9,723 27,352 
Deferred rents receivable262,808 257,887 
Debt and preferred equity investments, net of discounts and deferred origination fees of $1,638 and $1,811 and allowances of $13,520 and $6,630 in 2023 and 2022, respectively
334,327 623,280 
Investments in unconsolidated joint ventures3,152,752 3,190,137 
Deferred costs, net108,370 121,157 
Other assets472,071 546,945 
Total assets (1)
$9,690,582 $12,355,794 
Liabilities 
Mortgages and other loans payable, net$1,512,746 $3,227,563 
Revolving credit facility, net394,368 443,217 
Unsecured term loans, net1,243,649 1,641,552 
Unsecured notes, net99,769 99,692 
Accrued interest payable17,934 14,227 
Other liabilities453,349 236,211 
Accounts payable and accrued expenses146,332 154,867 
Deferred revenue136,063 272,248 
Lease liability - financing leases105,198 104,218 
Lease liability - operating leases887,412 895,100 
Dividend and distributions payable21,725 21,569 
Security deposits50,071 50,472 
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities100,000 100,000 
Total liabilities (1)
5,168,616 7,260,936 
Commitments and contingencies
Limited partner interests in SLGOP (4,139 and 3,670 limited partner common units outstanding at September 30, 2023 and December 31, 2022, respectively)
248,222 269,993 
Preferred units166,501 177,943 
14

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SL Green Operating Partnership, L.P.
Consolidated Balance Sheets
(in thousands)

September 30, 2023December 31, 2022
(unaudited)
Capital   
SLGOP partners' capital:  
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both September 30, 2023 and December 31, 2022
221,932 221,932 
SL Green partners' capital (685 and 680 general partner common units and 63,713 and 63,700 limited partner common units outstanding at September 30, 2023 and December 31, 2022, respectively)
3,748,165 4,313,497 
Accumulated other comprehensive income69,616 49,604 
Total SLGOP partners' capital4,039,713 4,585,033 
Noncontrolling interests in other partnerships67,530 61,889 
Total capital4,107,243 4,646,922 
Total liabilities and capital$9,690,582 $12,355,794 
(1) The Operating Partnership'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: $41.2 million and $41.2 million of land, $39.8 million and $41.0 million of building and improvements, $— million and $— million of building and leasehold improvements, $— million and $— million of right of use assets, $5.2 million and $4.4 million of accumulated depreciation, $664.1 million and $599.2 million of other assets included in other line items, $50.0 million and $49.8 million of real estate debt, net, $0.0 million and $0.2 million of accrued interest payable, $— million and $— million of lease liabilities, and $304.7 million and $146.4 million of other liabilities included in other line items as of September 30, 2023 and December 31, 2022, respectively.


The accompanying notes are an integral part of these consolidated financial statements.
15

Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Statements of Operations
(unaudited, in thousands, except per unit data)

Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenues
Rental revenue, net$150,991 $162,952 $531,978 $474,215 
Investment income9,689 29,513 27,849 69,808 
Other income12,540 19,991 58,038 57,842 
Total revenues173,220 212,456 617,865 601,865 
Expenses
Operating expenses, including related party expenses of $2 and $3 in 2023, and $0 and $5,695 in 2022
49,585 45,011 148,606 127,151 
Real estate taxes31,195 35,111 112,463 96,677 
Operating lease rent7,253 7,388 20,209 20,429 
Interest expense, net of interest income27,440 21,824 109,714 51,854 
Amortization of deferred financing costs2,152 2,043 6,327 5,908 
Depreciation and amortization50,212 48,462 197,844 142,359 
Loan loss and other investment reserves, net of recoveries — 6,890 — 
Transaction related costs166 292 1,083 321 
Marketing, general and administrative22,873 21,276 69,132 69,574 
Total expenses190,876 181,407 672,268 514,273 
Equity in net loss from unconsolidated joint ventures(15,126)(21,997)(44,470)(31,262)
Equity in net loss on sale of interest in unconsolidated joint venture/real estate — (79)(131)
Purchase price and other fair value adjustments10,183 (1,117)(6,987)(7,348)
Gain (loss) on sale of real estate, net516 4,276 (27,813)(61,104)
Depreciable real estate reserves and impairment389 — (305,527)— 
Net (loss) income(21,694)12,211 (439,279)(12,253)
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interests in other partnerships1,794 993 4,459 (2,269)
Preferred units distributions(1,903)(1,598)(5,352)(4,844)
Net (loss) income attributable to SLGOP(21,803)11,606 (440,172)(19,366)
Perpetual preferred unit distributions(3,738)(3,738)(11,213)(11,213)
Net (loss) income attributable to SLGOP common unitholders$(25,541)$7,868 $(451,385)$(30,579)
Basic (loss) earnings per unit$(0.38)$0.11 $(6.63)$(0.47)
Diluted (loss) earnings per unit$(0.38)$0.11 $(6.63)$(0.47)
Basic weighted average common units outstanding68,296 68,037 68,274 68,075 
Diluted weighted average common units and common unit equivalents outstanding68,296 68,897 68,274 69,249 


The accompanying notes are an integral part of these consolidated financial statements.
16

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SL Green Operating Partnership, L.P.
Consolidated Statements of Comprehensive (Loss) Income
(unaudited, in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net (loss) income$(21,694)$12,211 $(439,279)$(12,253)
Other comprehensive income:
Increase in unrealized value of derivative instruments, including SLGOP's share of joint venture derivative instruments12,799 50,488 23,062 111,378 
(Decrease) increase in unrealized value of marketable securities(181)1,605 (1,625)(642)
Other comprehensive income12,618 52,093 21,437 110,736 
Comprehensive (loss) income(9,076)64,304 (417,842)98,483 
Net loss (income) attributable to noncontrolling interests1,794 993 4,459 (2,269)
Other comprehensive income attributable to noncontrolling interests(771)(3,114)(1,425)(6,404)
Comprehensive (loss) income attributable to SLGOP$(8,053)$62,183 $(414,808)$89,810 


The accompanying notes are an integral part of these consolidated financial statements.

17

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SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(unaudited, in thousands, except per unit data)

 SL Green Operating Partnership Unitholders  
  Partners' Interest   
Series I
Preferred
Units
Common
Units
Common
Unitholders
Accumulated
Other
Comprehensive Loss
Noncontrolling
Interests
Total
Balance at June 30, 2023$221,932 64,387 $3,813,223 $57,769 $66,909 $4,159,833 
Net loss(20,229)(1,794)(22,023)
Other comprehensive income11,847 11,847 
Preferred distributions(3,738)(3,738)
DRSPP proceeds97 97 
Reallocation of noncontrolling interests in the Operating Partnership3,126 3,126 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings7,957 7,957 
Contribution to consolidated joint venture interests3,266 3,266 
Cash distributions to noncontrolling interests(851)(851)
Cash distributions declared ($0.812 per common unit, none of which represented a return of capital for federal income tax purposes)
(52,271)(52,271)
Balance at September 30, 2023$221,932 64,398 $3,748,165 $69,616 $67,530 $4,107,243 
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units
Common
Unitholders
Accumulated
Other
Comprehensive Income
Noncontrolling
Interests
Total
Balance at June 30, 2022$221,932 64,302 $4,453,271 $8,595 $64,966 $4,748,764 
Net income11,115 (993)10,122 
Acquisition of subsidiary interest from noncontrolling interest(29,742)(75)(29,817)
Other comprehensive income48,979 48,979 
Preferred distributions(3,738)(3,738)
DRSPP proceeds140 140 
Reallocation of noncontrolling interests in the operating partnership28,624 28,624 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings11 8,616 8,616 
Contribution to consolidated joint venture interests817 817 
Cash distributions to noncontrolling interests(148)(148)
Cash distributions declared ($0.932 per common unit, none of which represented a return of capital for federal income tax purposes)
(60,138)(60,138)
Balance at September 30, 2022$221,932 64,316 $4,408,148 $57,574 $64,567 $4,752,221 
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SL Green Operating Partnership, L.P.
Consolidated Statements of Capital
(unaudited, in thousands, except per unit data)
 SL Green Operating Partnership Unitholders  
  Partners' Interest   
Series I
Preferred
Units
Common
Units
Common
Unitholders
Accumulated Other Comprehensive Income Noncontrolling
Interests
Total
Balance at December 31, 2022$221,932 64,380 $4,313,497 $49,604 $61,889 $4,646,922 
Net loss(412,679)(4,459)(417,138)
Other comprehensive income20,012 20,012 
Preferred distributions(11,213)(11,213)
DRSPP proceeds15 439 439 
Reallocation of noncontrolling interests in the Operating Partnership(8,072)(8,072)
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings22,961 22,961 
Contributions to consolidated joint venture interests11,714 11,714 
Cash distributions to noncontrolling interests(1,614)(1,614)
Cash distributions declared ($2.437 per common unit, none of which represented a return of capital for federal income tax purposes)
(156,768)(156,768)
Balance at September 30, 2023$221,932 64,398 $3,748,165 $69,616 $67,530 $4,107,243 
SL Green Operating Partnership Unitholders
Partners' Interest
Series I
Preferred
Units
Common
Units
Common
Unitholders
Accumulated
Other
Comprehensive Income
Noncontrolling
Interests
Total
Balance at December 31, 2021$221,932 64,105 $4,589,702 $(46,758)$13,377 $4,778,253 
Net loss(17,535)2,269 (15,266)
Acquisition of subsidiary interest from noncontrolling interest(29,742)(75)(29,817)
Other comprehensive income104,332 104,332 
Preferred distributions(11,213)(11,213)
DRSPP proceeds339 339 
Reallocation of noncontrolling interests in the operating partnership23,539 23,539 
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings215 22,147 22,147 
Repurchases of common stock(1,971)(151,197)(151,197)
Contributions to consolidated joint venture interests52,164 52,164 
Cash distributions to noncontrolling interests(3,168)(3,168)
Issuance of special distribution paid primarily in units1,961 160,620 160,620 
Cash distributions declared ($2.797 per common unit, none of which represented a return of capital for federal income tax purposes)
(178,512)(178,512)
Balance at September 30, 2022$221,932 64,316 $4,408,148 $57,574 $64,567 $4,752,221 


The accompanying notes are an integral part of these consolidated financial statements.

19

Table of Contents

SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(unaudited, in thousands)

Nine Months Ended September 30,
 20232022
Operating Activities   
Net loss$(439,279)$(12,253)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization204,171 148,267 
Equity in net loss from unconsolidated joint ventures44,470 31,262 
Distributions of cumulative earnings from unconsolidated joint ventures514 448 
Equity in net loss on sale of interest in unconsolidated joint venture interest/real estate79 131 
Purchase price and other fair value adjustments6,987 7,348 
Depreciable real estate reserves and impairment305,527 — 
Loss on sale of real estate, net27,813 61,104 
Loan loss reserves and other investment reserves, net of recoveries6,890 — 
Deferred rents receivable(16,195)(1,371)
Non-cash lease expense15,477 17,332 
Other non-cash adjustments 6,645 (11,950)
Changes in operating assets and liabilities:
Tenant and other receivables(2,852)7,800 
Related party receivables16,466 5,803 
Deferred lease costs(8,066)(10,227)
Other assets(13,254)(35,114)
Accounts payable, accrued expenses, other liabilities and security deposits23,655 21,345 
Deferred revenue9,978 17,208 
Lease liability - operating leases(7,688)2,495 
Net cash provided by operating activities181,338 249,628 
Investing Activities
Acquisitions of real estate property (64,491)
Additions to land, buildings and improvements(194,035)(194,997)
Acquisition deposits and deferred purchase price 75,400 
Investments in unconsolidated joint ventures(119,522)(146,598)
Distributions in excess of cumulative earnings from unconsolidated joint ventures108,884 92,217 
Net proceeds from disposition of real estate/joint venture interest547,605 353,853 
Cash and restricted cash assumed from acquisition of real estate investment 60,494 
Proceeds from sale or redemption of marketable securities 11,465 
Other investments(17,545)1,619 
Origination of debt and preferred equity investments(53,703)(40,053)
Repayments or redemption of debt and preferred equity investments 124,405 
Net cash provided by investing activities271,684 273,314 
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SL Green Operating Partnership, L.P.
Consolidated Statements of Cash Flows
(unaudited, in thousands)

Nine Months Ended September 30,
 20232022
Financing Activities  
Proceeds from mortgages and other loans payable 381,980 
Repayments of mortgages and other loans payable(4,340)(290,936)
Proceeds from revolving credit facility, term loans and unsecured notes358,000 1,124,000 
Repayments of revolving credit facility, term loans and unsecured notes(808,000)(1,364,000)
Proceeds from stock options exercised and DRSPP issuance439 339 
Repurchase of common units (151,197)
Redemption of preferred units(11,700)(17,967)
Redemption of OP units(8,900)(35,316)
Distributions to noncontrolling interests in other partnerships(1,614)(3,168)
Contributions from noncontrolling interests in other partnerships3,580 52,164 
Acquisition of subsidiary interest from noncontrolling interest (29,817)
Distributions paid on common and preferred units(184,145)(209,759)
Other obligations related to secured borrowing129,656 77,874 
Tax withholdings related to restricted share awards (3,915)
Deferred loan costs(729)(5,130)
Net cash used in financing activities(527,753)(474,848)
Net (decrease) increase in cash, cash equivalents, and restricted cash(74,731)48,094 
Cash, cash equivalents, and restricted cash at beginning of year384,054 336,984 
Cash, cash equivalents, and restricted cash at end of period$309,323 $385,078 
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Exchange of preferred equity investment for real estate or equity in joint venture$ $190,652 
Exchange of debt investment for real estate or equity in joint venture349,946 193,995 
Assumption of mortgage and mezzanine loans 1,712,750 
Issuance of special distribution paid primarily in units 160,620 
Tenant improvements and capital expenditures payable 18,518 
Fair value adjustment to noncontrolling interest in the Operating Partnership8,072 23,539 
Deconsolidation of a subsidiary101,351 — 
Contribution to consolidated joint venture interest8,134 — 
Debt and preferred equity investments 302 
Removal of fully depreciated commercial real estate properties7,747 4,048 
Recognition of right of use assets and related lease liabilities 57,938 
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Nine Months Ended September 30,
 20232022
Cash and cash equivalents$189,750 $201,267 
Restricted cash119,573 183,811 
Total cash, cash equivalents, and restricted cash$309,323 $385,078 
The accompanying notes are an integral part of these consolidated financial statements.

21


SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements
September 30, 2023
(unaudited)
1. Organization and Basis of Presentation
SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as well as 95% of the economic interest in the management, leasing and construction companies which are referred to as S.L. Green Management Corp, or the Service Corporation. All of the management, leasing and construction services that are provided to the properties that are wholly-owned by us and that are provided to certain joint ventures are conducted through SL Green Management LLC and S.L. Green Management Corp., respectively, which are 100% owned by the Operating Partnership. The Company has qualified, and expects to qualify in the current fiscal year, as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to stockholders, is permitted to minimize the payment of Federal income taxes at the corporate level. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.
Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. The Company is the sole managing general partner of the Operating Partnership. As of September 30, 2023, noncontrolling investors held, in the aggregate, a 6.04% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership. The Operating Partnership is considered a variable interest entity, or VIE, in which we are the primary beneficiary. See Note 11, "Noncontrolling Interests on the Company's Consolidated Financial Statements."
On September 30, 2023, 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:
  ConsolidatedUnconsolidatedTotal
LocationProperty
Type
Number of BuildingsApproximate Square Feet (unaudited)Number of BuildingsApproximate Square Feet (unaudited)Number of BuildingsApproximate Square Feet (unaudited)Weighted Average Leased Occupancy (1) (unaudited)
Commercial:
ManhattanOffice13 8,399,141 12 15,412,174 25 23,811,315 89.3 %
Retail17,888 294,865 10 312,753 91.0 %
Development/Redevelopment(1)(2)1,466,419 2,893,357 4,359,776 N/A
19 9,883,448 23 18,600,396 42 28,483,844 N/A
SuburbanOffice862,800 — — 862,800 77.4 %
Total commercial properties26 10,746,248 23 18,600,396 49 29,346,644 N/A
Residential:
ManhattanResidential(2)140,382 221,884 362,266 99.0 %
Total portfolio27 10,886,630 24 18,822,280 51 29,708,910 N/A
(1)The weighted average leased occupancy for commercial properties represents the total leased square footage divided by the total square footage at acquisition. The weighted average leased occupancy for residential properties represents the total leased units divided by the total available units. Properties under construction are not included in the calculation of weighted average leased occupancy.
(2)As of September 30, 2023, we owned a building at 7 Dey Street / 185 Broadway that was comprised of approximately 140,382 square feet (unaudited) of residential space and approximately 50,206 square feet (unaudited) of office and retail space that is under development. For the purpose of this report, we have included this building in the number of residential properties we own. However, we have included only the residential square footage in the residential approximate square footage, and have listed the balance of the square footage as development square footage.
As of September 30, 2023, we also managed one office building owned by a third party encompassing approximately 0.3 million square feet (unaudited), and held debt and preferred equity investments with a book value of $334.3 million, excluding debt and preferred equity investments and other financing receivables totaling $8.3 million that are included in balance sheet line items other than the Debt and preferred equity investments line item.
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Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Partnership Agreement
In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, we allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners, subject to the priority distributions with respect to preferred units and special provisions that apply to Long Term Incentive Plan ("LTIP") Units. As the managing general partner of the Operating Partnership, we are required to take such reasonable efforts, as determined by us in our sole discretion, to cause the Operating Partnership to distribute sufficient amounts to enable the payment of sufficient dividends by us to minimize any Federal income or excise tax at the Company level. Under the Operating Partnership Agreement, each limited partner has the right to redeem units of limited partnership interests for cash, or if we so elect, shares of SL Green's common stock on a one-for-one basis.
Basis of Quarterly Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the financial position of the Company and the Operating Partnership at September 30, 2023 and the results of operations for the periods presented have been included. The operating results for the period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 of the Company and the Operating Partnership.
The consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements as of that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
2. Significant Accounting Policies
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.
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 3 years 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 1 year to 15 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 1 year to 15 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 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.
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Table of Contents
SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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 consolidated statements of operations, operating leases are expensed through operating lease rent while financing leases are expensed through amortization and interest expense. 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 fair value of the property as calculated in accordance with Accounting Standards Codification, or ASC 820. 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.
In April 2023, the ground rent appraisal proceeding concluded for our wholly-owned leasehold interest at 625 Madison Avenue. As a result of that proceeding, the ground rent was reset from the previous rent of $4.61 million per annum to a new rent of $20.25 million per annum, effective as of July 1, 2022. Following a strategic review of the property that addressed a range of relevant considerations, including the increase in ground rent to an amount substantially above what the Company believed was appropriate, the Company recorded a $305.9 million charge to write down the carrying value of its investment in the leasehold interest to zero in the quarter ending June 30, 2023, which is included in Depreciable real estate reserves and impairments in the consolidated statement of operations.
For the three months ended September 30, 2023, we recognized a reduction of rental revenue of ($0.1 million) for the amortization of aggregate above-market leases in excess of below-market leases resulting from the allocation of the purchase price of the applicable properties. For the nine months ended September 30, 2023, we recognized additional rental revenue of $14.3 million for the amortization of aggregate below-market leases in excess of above-market leases. For the three and nine months ended September 30, 2022, we recognized additional rental revenue of $0.2 million and a reduction of rental revenue of ($0.1 million), respectively.
The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and intangible liabilities (acquired below-market leases) as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Identified intangible assets (included in other assets):
Gross amount$189,680 $403,552 
Accumulated amortization(184,491)(190,066)
Net$5,189 $213,486 
Identified intangible liabilities (included in deferred revenue):
Gross amount$205,394 $361,338 
Accumulated amortization(202,000)(212,191)
Net$3,394 $149,147 
Cash and Cash Equivalents
We consider all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Restricted Cash
Restricted cash primarily consists of security deposits held on behalf of our tenants, interest reserves, as well as capital improvement and real estate tax escrows required under certain loan agreements.
Fair Value Measurements
See Note 16, "Fair Value Measurements."
Investment in Marketable Securities
At acquisition, we designate a debt security as held-to-maturity, available-for-sale, or trading. As of September 30, 2023, we did not have any debt securities designated as held-to-maturity or trading. We account for our available-for-sale securities at fair value pursuant to 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. Credit losses are recognized in accordance with ASC 326. We account for our equity marketable securities at fair value pursuant to ASC 820-10, with the net unrealized gains or losses reported in net income.
As of September 30, 2023 and December 31, 2022, we held the following marketable securities (in thousands):
September 30, 2023December 31, 2022
Commercial mortgage-backed securities$9,616 $11,240 
Total investment in marketable securities$9,616 $11,240 
The cost basis of the commercial mortgage-backed securities was $11.5 million as of September 30, 2023 and December 31, 2022, respectively. These securities mature at various times through 2030. All securities were in an unrealized loss position as of September 30, 2023 and December 31, 2022 with an unrealized loss of $1.9 million and a fair value of $9.6 million as of September 30, 2023, and an unrealized loss of $0.3 million and a fair value of $11.2 million as of December 31, 2022. The securities were in a continuous unrealized loss position for less than 12 months as of September 30, 2023 and December 31, 2022. We do not intend to sell our other securities, and it is more likely than not that we will not be required to sell the investments before recovery of their amortized cost bases.
We did not dispose of any debt marketable securities during three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2022, we received aggregate net proceeds of $7.8 million from the sale of one debt marketable security and $3.7 million from the repayment of one debt marketable security.
We held no equity marketable securities as of September 30, 2023 and December 31, 2022. We recognized $0.1 million of unrealized gain for the three months ended September 30, 2022 and $6.1 million of unrealized loss for the nine months ended September 30, 2022.
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 each joint ventures' actual and projected cash flows. We do not believe that the values of any of our equity investments were impaired at September 30, 2023.
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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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.
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 available for its intended use by the lessee.
To determine whether the leased space is available for its intended use by the lessee, management evaluates whether we or the tenant are 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.
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 certain operating expenses for the building over a base year. In some leases, in lieu of paying additional rent based upon increases in certain 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 non-lease 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 or loss on sale of real estate assets when we no longer have a controlling financial interest in the entity owning 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 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.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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.
We consider a debt and preferred equity investment to be past due when amounts contractually due have not been paid. 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 is resumed on any debt or preferred equity investment that is on non-accrual status when such debt or preferred equity investment becomes contractually current and performance is demonstrated to be resumed.
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.
Debt and Preferred Equity Investments
Debt and preferred equity investments are presented at the net amount expected to be collected in accordance with ASC 326. An allowance for loan losses is deducted from the amortized cost basis of the financial assets to present the net carrying value at the amount expected to be collected through the expected maturity date of such investments. The expense for loan loss and other investment reserves is the charge to earnings to adjust the allowance for loan losses to the appropriate level. Amounts are written off from the allowance when we de-recognize the related investment either as a result of a sale of the investment or acquisition of equity interests in the collateral.
The Company evaluates the amount expected to be collected based on current market and economic conditions, historical loss information, and reasonable and supportable forecasts. The Company's assumptions are derived from both internal data and external data which may include, among others, governmental economic projections for the New York City Metropolitan area, public data on recent transactions and filings for securitized debt instruments. This information is aggregated by asset class and adjusted for duration. Based on these inputs, loans are evaluated at the individual asset level. In certain instances, we may also use a probability-weighted model that considers the likelihood of multiple outcomes and the amount expected to be collected for each outcome.
The evaluation of the possible 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 requires significant judgment, which include both asset level and market assumptions over the relevant time period.
In addition, quarterly, the Company assigns each loan a risk rating. Based on a 3-point scale, loans are rated “1” through “3,” from lower risk to higher 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. Loans with risk ratings of 2 or above are evaluated to determine whether the expected risk of loss is appropriately captured through the combination of our expectations of current conditions, historical loss information and supportable forecasts described above or whether risk characteristics specific to the loan warrant the use of a probability-weighted model.
Financing investments that are classified as held for sale are carried at the expected amount to be collected 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 expected amount to be collected.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Other financing receivables that are included in balance sheet line items other than the Debt and preferred equity investments line are also measured at the net amount expected to be collected.
Accrued interest receivable amounts related to these debt and preferred equity investment and other financing receivables are recorded at the net amount expected to be collected within Other assets in the consolidated balance sheets. Accrued interest receivables that are written off are recognized as an expense in loan loss and other investment reserves.
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, 2023, we recorded Federal, state and local tax provisions totaling $2.5 million and $5.2 million, respectively. During the three months ended September 30, 2022, we recorded a Federal, state and local tax benefit of $0.1 million. During the nine months ended September 30, 2022, we recorded a Federal, state and local tax provision of $2.2 million.
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.
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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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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 New York City. See Note 5, "Debt and Preferred Equity Investments."
We perform initial and ongoing evaluations of the credit quality 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 potential source of funds to offset the economic costs associated with lost revenue from that tenant and the costs associated with re-tenanting a space. The properties in our real estate portfolio are located in the New York metropolitan area, principally in Manhattan. Our tenants operate in various industries. Other than one tenant, Paramount Global (formerly ViacomCBS Inc.), which accounted for 6.0% of our share of annualized cash rent as of September 30, 2023, no other tenant in our portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of joint venture annualized cash rent, for the three months ended September 30, 2023.
For the three months ended September 30, 2023, the following properties contributed more than 5.0% of our annualized cash rent from office properties, including our share of annualized cash rent from joint venture office properties:
PropertyThree months ended September 30, 2023
One Vanderbilt Avenue15.6%
11 Madison Avenue8.3%
420 Lexington Ave6.8%
1515 Broadway6.4%
245 Park Avenue5.7%
280 Park Avenue5.7%
1185 Avenue of the Americas5.5%
Accounting Standards Updates
In March 2022, the FASB issued ASU No. 2022-02 Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement guidance and, instead, requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulties. Additionally, ASU 2022-02 requires an entity to disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for entities in accordance with Subtopic 326-20, which requires that an entity disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for reporting periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this guidance on January 1, 2023 and it did not have a material impact on the Company's consolidated financial statements.
In August 2023, the FASB issued ASU No. 2023-05 Business Combinations - Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement. ASU 2023-05 addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements. The objectives of the amendments are to provide decision-useful information to investors and other allocators of capital (collectively, investors) in a joint venture's financial statements and reduce diversity in practice. The amendments require that a joint venture apply the following key adaptations from the business combinations guidance upon formation: (i) a joint venture is the formation of a new entity without an accounting acquirer, (ii) a joint venture measures its identifiable net assets and goodwill, if any, at the formation date, (iii) initial measurement of a joint venture's total net assets is equal to the fair value of 100 percent of the joint venture's equity, and (iv) a joint venture provides relevant disclosures. ASU 2023-05 is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted in any interim or annual period in which financial statements have not yet been issued, either prospectively or retrospectively. We are currently evaluating the impact of the adoption of ASU 2023-05 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
3. Property Acquisitions
During the nine months ended September 30, 2023, we did not acquire any properties from a third party.
4. Properties Held for Sale and Property Dispositions
Properties Held for Sale
As of September 30, 2023, no properties were classified as held for sale.
Property Dispositions
The following table summarizes the properties disposed of during the nine months ended September 30, 2023:
PropertyDisposition DateProperty TypeUnaudited Approximate Usable Square Feet
Sales Price (1)
(in millions)
Loss on Sale (2)
(in millions)
245 Park Avenue (3)
June 2023Fee Interest1,782,793 $1,995.0 $(28.3)
(1)Sales price represents the gross sales price for a property or the gross asset value for the sale of interests in a property.
(2)The loss on sale is net of $8.0 million of employee compensation accrued in connection with the realization of the investment. The amounts do not include adjustments for expenses recorded in periods subsequent to the quarter in which the disposition was consummated.
(3)In June 2023, the Company sold a 49.9% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of the 50.1% interest we retained. We recorded our retained investment at fair value which resulted in the recognition of a fair value adjustment of ($17.0 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 Venture."
5. Debt and Preferred Equity Investments
Below is a summary of the activity in our debt and preferred equity investments for the nine months ended September 30, 2023 and the twelve months ended December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Balance at beginning of year (1)
$623,280 $1,088,723 
Debt investment originations/fundings/accretion (2)
61,845 62,992 
Preferred equity investment originations/accretion (2)
6,039 37,505 
Redemptions/sales/syndications/equity ownership/amortization(349,947)(565,940)
Net change in loan loss reserves(6,890)— 
Balance at end of period (1)
$334,327 $623,280 
(1)Net of unamortized fees, discounts, and premiums.
(2)Accretion includes amortization of fees and discounts and paid-in-kind investment income.
Below is a summary of our debt and preferred equity investments as of September 30, 2023 (dollars in thousands):
Floating RateFixed RateTotal Carrying ValueSenior FinancingWeighted Average Yield at End of Period
Maturity (1)
TypeCarrying ValueFace ValueInterest RateCarrying ValueFace ValueInterest Rate
Mezzanine Debt$158,430 $158,604 
S + 4.95% - 13.25%
$50,000 $64,985 
7.00% - 14.30%
$208,430 $1,069,704 9.15%2023 - 2029
Preferred Equity  125,897 125,897 6.5%125,897 250,000 6.55%2027
Balance at end of period$158,430 $158,604 $175,897 $190,882 $334,327 $1,319,704 
(1)Excludes available extension options to the extent they have not been exercised as of the date of this filing.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
The following table is a roll forward of our total allowance for loan losses for the nine months ended September 30, 2023 and the twelve months ended December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Balance at beginning of year$6,630 $6,630 
Current period provision for loan loss6,890 — 
Balance at end of period (1)
$13,520 $6,630 
(1)As of September 30, 2023, all debt and preferred equity investments on non-accrual had an allowance for loan loss except for one debt investment with a carrying value of $50.0 million.

As of September 30, 2023, three investments with carrying values, net of reserves, totaling of $88.8 million were not performing in accordance with their respective terms. As of December 31, 2022, one investment with a carrying value, net of reserves, of $6.9 million was not performing in accordance with its respective terms. This is further discussed in the Debt Investments and Preferred Equity Investments tables below.
No other financing receivables were 90 days past due as of September 30, 2023 and December 31, 2022.
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by risk rating as of September 30, 2023 and December 31, 2022 (dollars in thousands):
Risk RatingSeptember 30, 2023December 31, 2022
1 - Low Risk Assets - Low probability of loss
$207,156 $264,069 
2 - Watch List Assets - Higher potential for loss
127,171 352,321 
3 - High Risk Assets - Loss more likely than not 6,890 
$334,327 $623,280 
The following table sets forth the carrying value of our debt and preferred equity investment portfolio by year of origination and risk rating as of September 30, 2023 (dollars in thousands):
As of September 30, 2023
Risk Rating
2023 (1)
2022 (1)
2021 (1)
Prior (1)(2)
Total
1 - Low Risk Assets - Low probability of loss
$— $— $— $207,156 $207,156 
2 - Watch List Assets - Higher potential for loss
— — — 127,171 127,171 
3 - High Risk Assets - Loss more likely than not
— — — —  
$— $— $— $334,327 $334,327 
(1)Year in which the investment was originated or acquired by us or in which a material modification occurred.
(2)During the nine months ended September 30, 2023, we recognized a $6.9 million provision for loan loss related to an investment originated prior to 2021.
We have determined that we have one portfolio segment of financing receivables as of September 30, 2023 and December 31, 2022 comprised of commercial real estate which is primarily recorded in debt and preferred equity investments.
Included in Other assets is an additional amount of financing receivables representing loans to joint venture partners totaling $9.1 million and $9.0 million as of September 30, 2023 and December 31, 2022, respectively. The Company recorded no provisions for loan losses related to these financing receivables for the three and nine months ended September 30, 2023 and 2022. All of these loans have a risk rating of 2 and were performing in accordance with their respective terms. One loan with a carrying value of $5.6 million was put on non-accrual in July 2020 and remains on non-accrual as of September 30, 2023. No investment income has been recognized subsequent to it being put on non-accrual.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Debt Investments
    As of September 30, 2023 and December 31, 2022, we held the following debt investments with an aggregate weighted average current yield of 9.15% as of September 30, 2023 (dollars in thousands):
Loan TypeSeptember 30, 2023
Future Funding
Obligations
September 30, 2023 Senior
Financing
September 30, 2023
Carrying Value (1)
December 31, 2022
Carrying Value
(1)
Maturity
Date
(2)
Fixed Rate Investments:
Mezzanine Loan (3)(4)
$ $105,000 $13,366 $13,366 June 2024
Mezzanine Loan 95,000 30,000 30,000 January 2025
Mezzanine Loan 85,000 20,000 20,000 December 2029
Mezzanine Loan (5)
   225,367 
Mezzanine Loan (5)
   77,109 
Total fixed rate$ $285,000 $63,366 $365,842  
Floating Rate Investments:
Mezzanine Loan (6)
$ $275,000 $50,000 $50,000 April 2023
Mezzanine Loan3,761 54,000 8,243 8,243 November 2023
Mezzanine Loan3,723 269,620 61,258 46,884 May 2024
Mezzanine Loan 186,084 39,083 39,083 January 2026
Total floating rate$7,484 $784,704 $158,584 $144,210  
Allowance for loan loss $ $ $(13,520)$(6,630)
Total$7,484 $1,069,704 $208,430 $503,422 
(1)Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.
(2)Represents contractual maturity, excluding any extension options to the extent they have not been exercised as of the date of this filing.
(3)Carrying value is net of a $12.0 million participation that was sold and did not meet the conditions for sale accounting. That participation is included in Other assets and Other liabilities on the consolidated balance sheets as a result.
(4)This loan went into default and was put on non-accrual in June 2020 and remains on non-accrual as of September 30, 2023. No investment income has been recognized subsequent to it being put on non-accrual. In the first quarter of 2023, the Company fully reserved the balance of the investment. Additionally, we determined the borrower entity to be a VIE, in which we are not the primary beneficiary.
(5)In September 2023, following a UCC foreclosure, the Company converted its previous mezzanine debt investments in the fee interest at 625 Madison Avenue to a 90.43% ownership interest.
(6)This loan went into default and was put on non-accrual in January 2023 and remains on non-accrual as of September 30, 2023. No investment income has been recognized subsequent to it being put on non-accrual. The Company is in discussions with the borrower with respect to the loan.
Preferred Equity Investments
As of September 30, 2023 and December 31, 2022, we held the following preferred equity investment with an aggregate weighted average current yield of 6.55% as of September 30, 2023 (dollars in thousands):
TypeSeptember 30, 2023
Future Funding
Obligations
September 30, 2023 Senior
Financing
September 30, 2023
Carrying Value (1)
December 31, 2022
Carrying Value
(1)
Mandatory Redemption (2)
Preferred Equity$ $250,000 $125,897 $119,858 February 2027
Allowance for loan loss $ $ $ $— 
Total$ $250,000 $125,897 $119,858 
(1)Carrying value is net of deferred origination fees.
(2)Represents contractual redemption, excluding any unexercised extension options.

6. Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of September 30, 2023, the book value of these investments was $3.2 billion, net of investments with negative book values totaling $129.1 million for which we have an implicit commitment to fund future capital needs.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
As of September 30, 2023, 800 Third Avenue, 21 East 66th Street and 625 Madison Avenue are VIEs in which we are not the primary beneficiary. As of December 31, 2022, 800 Third Avenue and 21 East 66th Street are VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $453.7 million and $86.2 million as of September 30, 2023 and December 31, 2022, respectively. Our maximum loss is limited to the amount of our equity investment in these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies." All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting.
The table below provides general information on each of our joint ventures as of September 30, 2023:
PropertyPartner
Ownership
Interest
(1)
Economic
Interest
(1)
Unaudited Approximate Square Feet
100 Park AvenuePrudential Real Estate Investors49.90%49.90%834,000 
717 Fifth AvenueWharton Properties / Private Investor10.92%10.92%119,500 
800 Third AvenuePrivate Investors60.52%60.52%526,000 
919 Third AvenueNew York State Teacher's Retirement System51.00%51.00%1,454,000 
11 West 34th StreetPrivate Investor / Wharton Properties30.00%30.00%17,150 
280 Park AvenueVornado Realty Trust50.00%50.00%1,219,158 
1552-1560 Broadway (2)
Wharton Properties50.00%50.00%57,718 
10 East 53rd StreetCanadian Pension Plan Investment Board55.00%55.00%354,300 
21 East 66th Street (3)
Private Investors32.28%32.28%13,069 
650 Fifth Avenue (4)
Wharton Properties50.00%50.00%69,214 
11 Madison AvenuePGIM Real Estate60.00%60.00%2,314,000 
One Vanderbilt AvenueNational Pension Service of Korea / Hines Interest LP71.01%71.01%1,657,198 
Worldwide PlazaRXR Realty / New York REIT24.95%24.95%2,048,725 
1515 BroadwayAllianz Real Estate of America56.87%56.87%1,750,000 
2 Herald SquareIsraeli Institutional Investor51.00%51.00%369,000 
115 Spring StreetPrivate Investor51.00%51.00%5,218 
15 Beekman (5)
A fund managed by Meritz Alternative Investment Management20.00%20.00%221,884 
85 Fifth AvenueWells Fargo36.27%36.27%12,946 
One Madison Avenue (6)
National Pension Service of Korea / Hines Interest LP / International Investor25.50%25.50%1,048,700 
220 East 42nd StreetA fund managed by Meritz Alternative Investment Management51.00%51.00%1,135,000 
450 Park Avenue (7)
Korean Institutional Investor / Israeli Institutional Investor
50.10%25.10%337,000 
5 Times SquareRXR Realty led investment group31.55%31.55%1,131,735 
245 Park Avenue (8)
U.S. Affiliate of Mori Trust Co., Ltd50.10%50.10%1,782,793 
625 Madison Avenue (9)
Private Investor90.43%90.43%563,000 
(1)Ownership interest and economic interest represent the Company's interests in the joint venture as of September 30, 2023. Changes in ownership or economic interests within the current year are disclosed in the notes below.
(2)The joint venture that owns 1552 Broadway also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(3)We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in two residential units at the property. In October, together with our joint venture partners, we entered into an agreement to sell the equity interests in the condominium units at the property. The sale is anticipated to close in the fourth quarter of 2023, subject to customary closing conditions.
(4)The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
(5)In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
(6)In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of our remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment of $187.5 million. The fair value of our investment was determined by the terms of the joint venture agreement governing the capitalization of the project. In 2021, the Company admitted an additional partner to the development project with the partner's indirect ownership in the joint venture totaling 25.0%. The transaction did not meet sale accounting under ASC 860 and, as a result, was treated as a secured borrowing for accounting purposes and is included in Other liabilities in our consolidated balance sheets at September 30, 2023 and December 31, 2022.
(7)The 50.1% ownership interest reflected in this table is comprised of our 25.1% economic interest and a 25.0% economic interest held by a third-party. The third-party's economic interest is held within a joint venture that we consolidate and recognize in Noncontrolling interests in other partnerships on our consolidated balance sheet. An additional third-party owns the remaining 49.9% economic interest in the property.
(8)In June 2023, the Company sold a 49.9% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of the 50.1% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of ($17.0 million) during the three and nine months ended September 30, 2023. The fair value of our investment was determined by the terms of the joint venture agreement.
(9)In September 2023, following a UCC foreclosure, the Company converted its previous mezzanine debt investments in the fee interest at 625 Madison Avenue to a 90.43% ownership interest. See Note 5, "Debt and Preferred Equity Investments."
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the nine months ended September 30, 2023:
PropertyOwnership Interest DisposedDisposition DateGross Asset Valuation (in millions)
Loss on Sale (in millions) (1)
121 Greene Street50.0%February 2023$14.0 $(0.3)
(1)Represents the Company's share of the loss.

Joint Venture Mortgages and Other Loans Payable
We generally finance our joint ventures with non-recourse debt. In certain cases, we may provide guarantees or master leases, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases as of September 30, 2023 and December 31, 2022, respectively, are as follows (dollars in thousands):
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Property
Economic
Interest
(1)
Maturity
Date
Final Maturity Date (2)
Interest
Rate (3)
September 30, 2023December 31, 2022
Fixed Rate Debt:
717 Fifth Avenue10.92 %
   July 2022 (4)
   July 2022 (4)
5.02%$655,328 $655,328 
650 Fifth Avenue50.00 %
October 2023 (6)
January 20245.45%65,000 65,000 
220 East 42nd Street51.00 %June 2024June 20255.86%505,412 510,000 
5 Times Square31.55 %September 2024September 20267.07%434,816 400,000 
10 East 53rd Street55.00 %February 2025February 20255.45%220,000 220,000 
1515 Broadway56.87 %March 2025March 20253.93%767,179 782,321 
115 Spring Street51.00 %March 2025March 20255.50%65,550 — 
450 Park Avenue25.10 %June 2025June 20276.10%267,000 267,000 
11 Madison Avenue60.00 %September 2025September 20253.84%1,400,000 1,400,000 
One Madison Avenue (5)
25.50 %November 2025November 20263.59%662,663 467,008 
800 Third Avenue60.52 %February 2026February 20263.37%177,000 177,000 
919 Third Avenue51.00 %April 2026April 20286.11%500,000 500,000 
625 Madison Avenue90.43 %December 2026December 20266.05%223,200 — 
245 Park Avenue50.10 %June 2027June 20274.30%1,768,000 — 
Worldwide Plaza24.95 %November 2027November 20273.98%1,200,000 1,200,000 
One Vanderbilt Avenue71.01 %July 2031July 20312.95%3,000,000 3,000,000 
280 Park Avenue1,200,000 
21 East 66th Street 12,000 
Total fixed rate debt $11,911,148 $10,855,657 
Floating Rate Debt:
11 West 34th Street30.00 %
February 2023 (4)
February 2023 (4)
L+1.45%$23,000 $23,000 
650 Fifth Avenue50.00 %
October 2023 (6)
January 2024S+2.25%210,000 210,000 
2 Herald Square51.00 %November 2023November 2023S+2.06%182,500 182,500 
100 Park Avenue49.90 %December 2023December 2025S+2.36%360,000 360,000 
15 Beekman (7)
20.00 %January 2024July 2025S+1.61%123,168 86,738 
1552 Broadway50.00 %February 2024February 2024S+2.75%193,132 193,132 
280 Park Avenue50.00 %September 2024September 2024S+2.03%1,200,000 — 
5 Times Square31.55 %September 2024September 2026S+5.69%604,598 495,924 
21 East 66th Street32.28 %April 2027April 2027S+1.75%12,000 — 
21 East 66th Street32.28 %June 2033June 2033T+2.75%555 586 
115 Spring Street 65,550 
121 Greene Street 12,550 
Total floating rate debt$2,908,953 $1,629,980 
Total joint venture mortgages and other loans payable$14,820,101 $12,485,637 
Deferred financing costs, net(112,175)(136,683)
Total joint venture mortgages and other loans payable, net$14,707,926 $12,348,954 
(1)Economic interest represents the Company's interests in the joint venture as of September 30, 2023. 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)Reflects exercise of all available options. The ability to exercise extension options may be subject to certain conditions, including meeting tests based on the operating performance of the property.
(3)Interest rates as of September 30, 2023, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated spread over Term SOFR ("S") or 1-year Treasury ("T").
(4)As of the date of this filing, the loan is in maturity default. The Company is in discussions with the lender on a resolution.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
(5)The loan is a $1.25 billion construction facility with an initial term of five years with one, one year extension option. Advances under the loan are subject to costs incurred. In conjunction with the loan, the Company provided partial guarantees for interest and principal payments, the amounts of which are based on certain construction milestones and operating metrics. In July 2023, the facility was modified, which will allow the partnership to utilize the final tranche of the facility for an expanded range of uses, including additional amenities funded by construction cost savings and for hedging activities in contemplation of a permanent financing.
(6)As of the date of this filing, the Company has submitted its request to extend the maturity date of the loan in accordance with the loan agreement. While the Company believes the extension will be granted, the lender group is currently unable to respond given the turmoil in the Middle East.
(7)This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.

We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $3.5 million and $16.3 million from these services, net of our ownership share of the joint ventures, for the three and nine months ended September 30, 2023, respectively. We earned $5.8 million and $15.0 million from these services, net of our ownership share of the joint ventures, for the three and nine months ended September 30, 2022, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.
The combined balance sheets for the unconsolidated joint ventures, at September 30, 2023 and December 31, 2022 are as follows (in thousands):
September 30, 2023December 31, 2022
Assets (1)
Commercial real estate property, net$18,667,334 $15,989,642 
Cash and restricted cash691,274 709,299 
Tenant and other receivables, related party receivables, and deferred rents receivable668,137 601,552 
Other assets2,656,613 2,551,426 
Total assets$22,683,358 $19,851,919 
Liabilities and equity (1)
Mortgages and other loans payable, net$14,707,926 $12,348,954 
Deferred revenue1,156,816 1,077,901 
Lease liabilities993,041 1,000,356 
Other liabilities444,208 456,537 
Equity5,381,367 4,968,171 
Total liabilities and equity$22,683,358 $19,851,919 
Company's investments in unconsolidated joint ventures$3,152,752 $3,190,137 
(1)At September 30, 2023, $537.4 million of net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having given rise to the differences.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the three and nine months ended September 30, 2023 and 2022, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Total revenues$407,148 $330,705 $1,140,889 $997,670 
Operating expenses63,081 59,841 183,825 173,327 
Real estate taxes78,564 66,594 210,428 186,710 
Operating lease rent7,307 6,616 21,746 19,465 
Interest expense, net of interest income162,897 112,747 421,528 305,977 
Amortization of deferred financing costs6,897 7,116 21,140 20,568 
Depreciation and amortization138,199 116,511 380,867 343,183 
Total expenses456,945 369,425 1,239,534 1,049,230 
Loss on early extinguishment of debt —  (467)
Net loss before gain (loss) on sale$(49,797)$(38,720)$(98,645)$(52,027)
Company's equity in net loss from unconsolidated joint ventures$(15,126)$(21,997)$(44,470)$(31,262)
7. Deferred Costs
Deferred costs as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
September 30, 2023December 31, 2022
Deferred leasing costs$392,760 $407,188 
Less: accumulated amortization
(284,390)(286,031)
Deferred costs, net$108,370 $121,157 
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
8. Mortgages and Other Loans Payable
The mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt investments as of September 30, 2023 and December 31, 2022, respectively, were as follows (dollars in thousands):
PropertyMaturity
Date
Final Maturity Date (1)
Interest
Rate (2)
September 30, 2023December 31, 2022
Fixed Rate Debt:
7 Dey / 185 Broadway (3)
November 2023November 20237.59%$200,000 $200,000 
420 Lexington AvenueOctober 2024October 20403.99%278,724 283,064 
100 Church StreetJune 2025June 20275.89%370,000 370,000 
Landmark SquareJanuary 2027January 20274.90%100,000 100,000 
485 Lexington AvenueFebruary 2027February 20274.25%450,000 450,000 
245 Park Avenue 1,712,750 
Total fixed rate debt$1,398,724 $3,115,814 
Floating Rate Debt:
7 Dey / 185 Broadway (3)
November 2023November 2023S+2.85%$10,148 $10,148 
690 Madison AvenueJuly 2024July 2025S+0.50%60,000 60,000 
719 Seventh AvenueDecember 2024December 2024S+1.31%50,000 50,000 
Total floating rate debt$120,148 $120,148 
Total mortgages and other loans payable$1,518,872 $3,235,962 
Deferred financing costs, net of amortization(6,126)(8,399)
Total mortgages and other loans payable, net$1,512,746 $3,227,563 
(1)Reflects exercise of all available options. The ability to exercise extension options may be subject to certain tests based on the operating performance of the property.
(2)Interest rate as of September 30, 2023, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated spread over Term SOFR ("S"), unless otherwise specified.
(3)This loan is a $225.0 million construction facility, with reductions in interest cost based on meeting certain conditions. Advances under the loan are subject to incurred costs and funded equity requirements.
As of September 30, 2023 and December 31, 2022, the gross book value of the properties collateralizing the mortgages and other loans payable was approximately $1.9 billion and $3.8 billion, respectively.
9. Corporate Indebtedness
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was previously amended by the Company in November 2017, and was originally entered into by the Company in November 2012. As of September 30, 2023, the 2021 credit facility consisted of a $1.25 billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has two six-month, as-of-right extension options to May 15, 2027. 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, 2023, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans under the revolving credit facility, (ii) 80 basis points to 160 basis points for loans under Term Loan A, and (iii) 85 basis points to 165 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 instances where there are either only two ratings available or where there are more than two and the difference between them is one rating category, the applicable rating shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the average is not a recognized category.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
As of September 30, 2023, the applicable spread over adjusted Term SOFR plus 10 basis points for the 2021 credit facility was 140 basis points for the revolving credit facility, 160 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, 2023, the facility fee was 30 basis points.
As of September 30, 2023, we had $2.0 million of outstanding letters of credit, $400.0 million drawn under the revolving credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $850.0 million under the 2021 credit facility. As of September 30, 2023 and December 31, 2022, the revolving credit facility had a carrying value of $394.4 million and $443.2 million, respectively, net of deferred financing costs. As of September 30, 2023 and December 31, 2022, the term loan facilities had a carrying value of $1.2 billion and $1.2 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2021 credit facility.
The 2021 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
2022 Term Loan
In October 2022, we entered into a term loan agreement, referred to as the 2022 term loan. In September 2023, the 2022 term loan was repaid in full. The 2022 term loan consisted of a $425.0 million term loan with a maturity date of October 6, 2023. The 2022 term loan had one six-month as-of-right extension option to April 6, 2024. We also had an option, subject to customary conditions, to increase the capacity of the 2022 term loan to $500.0 million on or before January 7, 2023 without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions. In January 2023, the 2022 term loan was increased by $25.0 million to $425.0 million.
The 2022 term loan bore interest at a spread over adjusted Term SOFR plus 10 basis points, ranging from 100 basis points to 180 basis points, in each case based on the credit rating assigned to the senior unsecured long-term indebtedness of the Company. In instances where there were either only two ratings available or where there was more than two and the difference between them was one rating category, the applicable rating was the highest rating. In instances where there were more than two ratings and the difference between the highest and the lowest were two or more rating categories, then the applicable rating used was the average of the highest two, rounded down if the average was not a recognized category. As of December 31, 2022, the 2022 term loan had a carrying value of $398.2 million, net of deferred financing costs.
The Company and the Operating Partnership were borrowers jointly and severally obligated under the 2022 term loan.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of September 30, 2023 and December 31, 2022, respectively, by scheduled maturity date (dollars in thousands):
IssuanceSeptember 30, 2023
Unpaid
Principal
Balance
September 30, 2023
Accreted
Balance
December 31,
2022
Accreted
Balance
Interest
Rate (1)
Initial Term
(in Years)
Maturity Date
December 17, 2015 (2)
$100,000 $100,000 $100,000 4.27 %10December 2025
$100,000 $100,000 $100,000 
Deferred financing costs, net— (231)(308)
$100,000 $99,769 $99,692 
(1)Interest rate as of September 30, 2023.
(2)Issued by the Company and the Operating Partnership as co-obligors.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Restrictive Covenants
The terms of the 2021 credit facility and 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, 2023 and December 31, 2022, 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 26 basis points over three-month Term SOFR. 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, the 2021 credit facility, the 2022 term loan, trust preferred securities, senior unsecured notes and our share of joint venture debt as of September 30, 2023, including as-of-right extension options, were as follows (in thousands):
Scheduled
Amortization
PrincipalRevolving
Credit
Facility
Unsecured Term LoansTrust
Preferred
Securities
Senior
Unsecured
Notes
TotalJoint
Venture
Debt
Remaining 2023$1,486 $260,149 $— $— $— $— $261,635 $525,028 
20244,488 332,749 — 200,000 — — 537,237 1,318,885 
2025— 370,000 — — — 100,000 470,000 1,618,381 
2026— — — — — — — 563,977 
2027— 550,000 400,000 1,000,000 — — 1,950,000 1,189,059 
Thereafter— — — 50,000 100,000 — 150,000 2,130,404 
$5,974 $1,512,898 $400,000 $1,250,000 $100,000 $100,000 $3,368,872 $7,345,734 
Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Interest expense before capitalized interest$52,877 $40,553 $183,652 $105,165 
Interest on financing leases1,113 1,099 3,329 3,453 
Interest capitalized(25,483)(19,659)(77,916)(55,952)
Amortization of discount on assumed debt — 2,842 — 
Interest income(1,067)(169)(2,193)(812)
Interest expense, net$27,440 $21,824 $109,714 $51,854 
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
10. Related Party Transactions
Cleaning/ Security/ Messenger and Restoration Services
Prior to 2023, Alliance Building Services, or Alliance, and its affiliates, which provide services to certain properties owned by us, were previously partially owned by Gary Green, a son of Stephen L. Green, who serves as a member and as the chairman emeritus of our Board of Directors. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services, respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease agreements.
Income earned from the profit participation while Alliance was partially owned by Gary Green prior to 2023, which is included in Other income on the consolidated statements of operations, was $0.0 million and $1.4 million for the three and nine months ended September 30, 2022, respectively. We also recorded expenses, inclusive of capitalized expenses, of $0.0 million and $8.6 million for these services (excluding services provided directly to tenants) for the three and nine months ended September 30, 2022, respectively.
One Vanderbilt Avenue Investment
In December 2016, we entered into agreements with entities owned and controlled by our Chairman and CEO, Marc Holliday, and our President, Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt project (inclusive of the property and Summit One Vanderbilt) at the appraised fair market value for the interests acquired. This investment entitles these entities to receive approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly, subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0 million, respectively, which equaled the fair market value of the interests acquired as of the date the investment agreements were entered into as determined by an independent third party appraisal that we obtained.
Messrs. Holliday and Mathias have the right to tender their interests in the project upon stabilization (50% within three years after stabilization and 100% three years or more after stabilization). In addition, the agreement calls for us to repurchase these interests in the event of a sale of One Vanderbilt or a transactional change of control of the Company. We also have the right to repurchase these interests on the 7-year anniversary of the stabilization of the project or upon the occurrence of certain separation events prior to the stabilization of the project relating to each of Messrs. Holliday’s and Mathias’s continued service with us. The price paid upon a tender of the interests will equal the liquidation value of the interests at the time, with the value being based on the project's sale price, if applicable, or fair market value as determined by an independent third party appraiser. In 2022, stabilization of the property (but not Summit One Vanderbilt) was achieved. Therefore, Messrs. Holiday and Mathias exercised their rights to tender 50% of their interests in the property (but not Summit One Vanderbilt) for liquidation values of $17.9 million and $11.9 million, respectively, which were paid in July 2022.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
One Vanderbilt Avenue Leases
In November 2018, we entered into a lease agreement with the One Vanderbilt Avenue joint venture covering certain floors at the property. In March 2021, the lease commenced and we relocated our corporate headquarters to the leased space. For the three and nine months ended September 30, 2023, we recorded $0.7 million and $2.2 million, respectively, of rent expense under the lease. For the three and nine months ended September 30, 2022, we recorded $0.7 million and $2.2 million, respectively, of rent expense under the lease. Additionally, in June 2021, through a wholly-owned subsidiary, we entered into a lease agreement with the One Vanderbilt Avenue joint venture for Summit One Vanderbilt, which commenced in October 2021. For the three and nine months ended September 30, 2023 we recorded $17.0 million and $31.1 million, respectively, of rent expense under the lease, including percentage rent, of which $11.7 million and $21.0 million, respectively, was recognized as income as a component of Equity in net loss from unconsolidated joint ventures in our consolidated statements of operations. For the three and nine months ended September 30, 2022, we recorded $8.3 million and $26.0 million, respectively, of rent expense under the lease, including percentage rent, of which $5.5 million and $17.4 million, respectively, was recognized as income in Equity in net loss from unconsolidated joint ventures in our consolidated statements of operations.
Other
We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures as further described in Note 6, "Investments in Unconsolidated Joint Ventures." Amounts due from joint ventures and related parties as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
September 30, 2023December 31, 2022
Due from joint ventures$8,219 $26,812 
Other1,504 540 
Related party receivables$9,723 $27,352 
11. 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, 2023 and December 31, 2022, the noncontrolling interest unit holders owned 6.04%, or 4,139,334 units, and 5.39%, or 3,670,343 units, of the Operating Partnership, respectively. As of September 30, 2023, 4,139,334 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, 2023 and the twelve months ended December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Balance at beginning of period$269,993 $344,252 
Distributions(11,225)(16,272)
Issuance of common units16,350 22,855 
Redemption and conversion of common units(8,900)(40,901)
Net loss(27,493)(5,794)
Accumulated other comprehensive (loss) income allocation1,425 5,827 
Fair value adjustment8,072 (39,974)
Balance at end of period$248,222 $269,993 
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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, 2023:
IssuanceStated Distribution RateNumber of Units AuthorizedNumber of Units IssuedNumber of Units Outstanding
Annual Dividend Per Unit(1)
Liquidation Preference Per Unit(2)
Conversion Price Per Unit(3)
Date of Issuance
Series A (4)
5.00 %109,161 109,161 109,161 $50.0000 $1,000.00 $— August 2015
Series F7.00 %60 60 60 70.0000 1,000.00 29.12 January 2007
Series K3.50 %700,000 563,954 341,677 0.8750 25.00 134.67 August 2014
Series L4.00 %500,000 378,634 372,634 1.0000 25.00 — August 2014
Series R3.50 %400,000 400,000 400,000 0.8750 25.00 154.89 August 2015
Series S4.00 %1,077,280 1,077,280 1,077,280 1.0000 25.00 — August 2015
Series V (5)
5.00 %40,000 40,000 40,000 1.2500 25.00 — May 2019
Series W (6)
(6)(6)(6)(6)January 2020
(1)Dividends are cumulative, subject to certain provisions.
(2)Units are redeemable at any time at par for cash at the option of the unit holder 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)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 after July 15, 2024 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 such, no Subsidiary Series B Preferred Units have been issued as of September 30, 2023.
(5)The Series V Preferred Units are redeemable at any time after January 1, 2025 at par for cash at the option of the unit holder.
(6)The Series W preferred unit was issued in January 2020 in exchange for the then-outstanding Series O preferred unit. The holder of the Series W preferred unit is entitled to quarterly dividends in an amount calculated as (i) 1,350 multiplied by (ii) the current distribution per common unit of limited partnership in SL Green Operating Partnership. The holder has the right to require the Operating Partnership to repurchase the Series W unit for cash, or convert the Series W unit for Class B units, in each case at a price that is determined based on the closing price of the Company's common stock at the time such right is exercised. The unit's liquidation preference is the fair market value of the unit plus accrued distributions at the time of a liquidation event.
Below is a summary of the activity relating to the preferred units in the Operating Partnership for the nine months ended September 30, 2023 and the twelve months ended December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Balance at beginning of period$177,943 $196,075 
Issuance of preferred units — 
Redemption of preferred units(11,700)(17,967)
Dividends paid on preferred units(4,582)(6,198)
Accrued dividends on preferred units4,840 6,033 
Balance at end of period$166,501 $177,943 
12. 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, 2023, 64,397,983 shares of common stock and no shares of excess stock were issued and outstanding.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Share Repurchase Program
In August 2016, our Board of Directors approved a $1.0 billion share repurchase program under which we can buy shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of 2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
As of September 30, 2023, share repurchases executed under the program, excluding the redemption of OP units, were as follows:
Period
Shares repurchased(1)
Average price paid per share
Cumulative number of shares repurchased as part of the repurchase plan or programs
Year ended 20208,276,032$64.3029,661,978
Year ended 20214,474,649$75.4434,136,627
Year ended 20221,971,092$76.6936,107,719
(1)There were no share repurchases during the nine months ended September 30, 2023.
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 any time, in whole or from time to time in part, at par for cash. 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 2021, 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, 2023 and 2022, respectively (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Shares of common stock issued2,695 2,933 14,736 5,827 
Dividend reinvestments/stock purchases under the DRSPP$97 $140 $439 $339 
Earnings per Share
We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
SL Green's earnings per share for the three and nine months ended September 30, 2023 and 2022 are computed as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Numerator2023202220232022
Basic Earnings:
(Loss) income attributable to SL Green common stockholders$(23,967)$7,377 $(423,892)$(28,748)
Less: distributed earnings allocated to participating securities(408)(505)(1,225)(1,516)
Net (loss) income attributable to SL Green common stockholders (numerator for basic earnings per share)$(24,375)$6,872 $(425,117)$(30,264)
Add back: dilutive effect of earnings allocated to participating securities and contingently issuable shares 505  (484)
Add back: effect of dilutive securities (redemption of units to common shares)(1,574)491 (27,493)(1,831)
Net (loss) income attributable to SL Green common stockholders (numerator for diluted earnings per share)$(25,949)$7,868 $(452,610)$(32,579)
Three Months Ended September 30,Nine Months Ended September 30,
Denominator2023202220232022
Basic Shares:
Weighted average common stock outstanding64,114 63,949 64,099 63,971 
Effect of Dilutive Securities:
Operating Partnership units redeemable for common shares4,182 4,088 4,175 4,104 
Stock-based compensation plans 860  1,052 
Contingently issuable shares —  122 
Diluted weighted average common stock outstanding68,296 68,897 68,274 69,249 
The Company has excluded 1,402,771 and 1,380,364 common stock equivalents from the calculation of diluted shares outstanding for the three and nine months ended September 30, 2023, respectively, as they were anti-dilutive. The Company has excluded 621,134 and 517,574 common stock equivalents from the calculation of diluted shares outstanding for the three and nine months ended September 30, 2022, respectively, as they were anti-dilutive.
13. Partners' Capital of the Operating Partnership
The Company is the sole managing general partner of the Operating Partnership and at September 30, 2023 owned 64,397,983 general and limited partnership interests in the Operating Partnership and 9,200,000 Series I Preferred Units. Partnership interests in the Operating Partnership are denominated as “common units of limited partnership interest” (also referred to as “OP Units”) or “preferred units of limited partnership interest” (also referred to as “Preferred Units”). All references to OP Units and Preferred Units outstanding exclude such units held by the Company. A holder of an OP Unit may present such OP Unit to the Operating Partnership for redemption at any time (subject to restrictions agreed upon at the issuance of OP Units to particular holders that may restrict such right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, the Operating Partnership must redeem such OP Unit in exchange for the cash equal to the then value of a share of common stock of the Company, except that the Company may, at its election, in lieu of cash redemption, acquire such OP Unit for one share of common stock. Because the number of shares of common stock outstanding at all times equals the number of OP Units that the Company owns, one share of common stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of common stock. Each series of Preferred Units makes a distribution that is set in accordance with an amendment to the partnership agreement of the Operating Partnership. Preferred Units may also be convertible into OP Units at the election of the holder thereof or the Company, subject to the terms of such Preferred Units.
Net income (loss) allocated to the preferred unitholders and common unitholders reflects their pro rata share of net income (loss) and distributions.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
Limited Partner Units
As of September 30, 2023, limited partners other than SL Green owned 6.04%, or 4,139,334 common units, of the Operating Partnership.
Preferred Units
Preferred units not owned by SL Green are further described in Note 11, “Noncontrolling Interests on the Company’s Consolidated Financial Statements - Preferred Units of Limited Partnership Interest in the Operating Partnership.”
Earnings per Unit
The Operating Partnership's earnings per unit for the three and nine months ended September 30, 2023 and 2022, respectively, are computed as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Numerator2023202220232022
Basic Earnings:
Net (loss) income attributable to SLGOP common unitholders (numerator for diluted earnings per unit)
$(25,541)$7,868 $(451,385)$(30,579)
Less: distributed earnings allocated to participating securities(408)(505)(1,225)(1,516)
Net (loss) income attributable to SLGOP common unitholders (numerator for basic earnings per unit)$(25,949)$7,363 $(452,610)$(32,095)
Add back: dilutive effect of earnings allocated to participating securities and contingently issuable shares 505  (484)
Net (loss) income attributable to SLGOP common unitholders (numerator for diluted earnings per unit)$(25,949)$7,868 $(452,610)$(32,579)

Three Months Ended September 30,Nine Months Ended September 30,
Denominator2023202220232022
Basic units:
Weighted average common units outstanding68,296 68,037 68,274 68,075 
Effect of Dilutive Securities:
Stock-based compensation plans 860  1,052 
Contingently issuable units  —  122 
Diluted weighted average common units outstanding68,296 68,897 68,274 69,249 
The Operating Partnership has excluded 1,402,771 and 1,380,364 common unit equivalents from the diluted units outstanding for the three and nine months ended September 30, 2023, respectively, as they were anti-dilutive. The Operating Partnership has excluded 621,134 and 517,574 common unit equivalents from the diluted units outstanding for the three and nine months ended September 30, 2022, respectively, as they were anti-dilutive.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
14. Share-based Compensation
We have share-based employee and director compensation plans. Our employees are compensated through the Operating Partnership. Under each plan, whenever the Company issues common or preferred stock, the Operating Partnership issues an equivalent number of units of limited partnership interest of a corresponding class to the Company.
The Fifth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's Board of Directors in April 2022 and its stockholders in June 2022 at the Company's annual meeting of stockholders. The 2005 Plan authorizes the issuance of stock options, stock appreciation rights, unrestricted and restricted stock, phantom shares, dividend equivalent rights, cash-based awards and other equity-based awards. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 32,210,000 fungible units may be granted under the 2005 Plan. Currently, different types of awards count against the limit on the number of fungible units differently, with (1) full-value awards (i.e., those that deliver the full value of the award upon vesting, such as restricted stock) counting as 2.59 Fungible Units per share subject to such awards, (2) stock options, stock appreciation rights and other awards that do not deliver full value and expire five years from the date of grant counting as 0.84 fungible units per share subject to such awards, and (3) all other awards (e.g., 10-year stock options) counting as 1.0 fungible units per share subject to such awards. Awards granted under the 2005 Plan prior to the approval of the fifth amendment and restatement in June 2022 continue to count against the fungible unit limit based on the ratios that were in effect at the time such awards were granted, which may be different than the current ratios. As a result, depending on the types of awards issued, the 2005 Plan may result in the issuance of more or less than 32,210,000 shares. If a stock option or other award granted under the 2005 Plan expires or terminates, the common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Shares of our common stock distributed under the 2005 Plan may be treasury shares or authorized but unissued shares. Currently, unless the 2005 Plan has been previously terminated by the Company's Board of Directors, new awards may be granted under the 2005 Plan until June 1, 2032, which is the tenth anniversary of the date that the 2005 Plan was most recently approved by the Company's stockholders. As of September 30, 2023, 4.0 million fungible units were available for issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.
Stock Options and Class O LTIP Units
Options are granted with an exercise price at the fair market value of the Company's common stock on the date of grant and, subject to employment, generally expire five years or ten years from the date of grant, are not transferable other than on death, and generally vest in one year to five years commencing one year from the date of grant. We have also granted Class O LTIP Units, which are a class of LTIP Units in the Operating Partnership structured to provide economics similar to those of stock options. Class O LTIP Units, once vested, may be converted, at the election of the holder, into a number of common units of the Operating Partnership per Class O LTIP Unit determined by the increase in value of a share of the Company’s common stock at the time of conversion over a participation threshold, which equals the fair market value of a share of the Company’s common stock at the time of grant. Class O LTIP Units are entitled to distributions, subject to vesting, equal per unit to 10% of the per unit distributions paid with respect to the common units of the Operating Partnership.
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. There were no options granted during the nine months ended September 30, 2023 or the year ended December 31, 2022.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
A summary of the status of the Company's stock options as of September 30, 2023 and December 31, 2022, and changes during the nine months ended September 30, 2023 and year ended December 31, 2022 are as follows:
September 30, 2023December 31, 2022
Options OutstandingWeighted Average
Exercise Price
Options OutstandingWeighted Average
Exercise Price
Balance at beginning of period313,480 $97.59 394,089 $100.56 
Exercised  — — 
Lapsed or canceled(120,000)79.56 (80,609)112.14 
Balance at end of period193,480 $99.03 313,480 $97.59 
Options exercisable at end of period193,480 $99.03 313,480 $97.59 
The remaining weighted average contractual life of the options outstanding was 2.1 years and the remaining average contractual life of the options exercisable was 2.1 years.
During the three and nine months ended September 30, 2023, we recognized no compensation expense related to options. During the three and nine months ended September 30, 2022, we recognized no compensation expense related to options. As of September 30, 2023, there was no unrecognized compensation cost related to unvested stock options.
Restricted Shares
Shares are granted to certain employees, including our executives, and vesting occurs upon the completion of a service period or our meeting established financial performance criteria. Vesting occurs at rates ranging from 15% to 35% once performance criteria are reached.
A summary of the Company's restricted stock as of September 30, 2023 and December 31, 2022 and changes during the nine months ended September 30, 2023 and the year ended December 31, 2022, are as follows:
September 30, 2023December 31, 2022
Balance at beginning of period3,758,174 3,459,363 
Granted13,000 314,995 
Canceled(1,650)(16,184)
Balance at end of period3,769,524 3,758,174 
Vested during the period145,415 118,255 
Compensation expense recorded$5,782,841 $10,133,905 
Total fair value of restricted stock granted during the period$483,860 $16,804,931 
The fair value of restricted stock that vested during the nine months ended September 30, 2023 and the year ended December 31, 2022 was $10.0 million and $9.7 million, respectively. As of September 30, 2023, there was $7.1 million of total unrecognized compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 1.5 years.
We granted LTIP Units, which include bonus, time-based and performance-based awards, with a fair value of $37.9 million and $45.0 million as of September 30, 2023 and December 31, 2022, respectively. The grant date fair value of the LTIP Unit awards was calculated in accordance with ASC 718. A third-party consultant determined that the fair value of the LTIP Units has a discount to our common stock price. The discount was calculated by considering the inherent uncertainty that the LTIP Units will reach parity with other common partnership units and the illiquidity due to transfer restrictions. As of September 30, 2023, there was $50.5 million of total unrecognized compensation expense related to the time-based and performance-based awards, which is expected to be recognized over a weighted average period of 1.6 years.
During the three and nine months ended September 30, 2023, we recorded compensation expense related to bonus, time-based and performance-based awards of $10.6 million and $31.2 million, respectively. During the three and nine months ended September 30, 2022, we recorded compensation expense related to bonus, time-based and performance-based awards of $10.1 million and $30.5 million, respectively.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
For the three and nine months ended September 30, 2023, $0.3 million and $1.0 million, respectively, was capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and stock options. For the three and nine months ended September 30, 2022, $0.5 million and $1.4 million, respectively, was capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and stock options.
Deferred Compensation Plan for Directors
Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock units.
During the nine months ended September 30, 2023, 37,112 phantom stock units and 27,739 shares of common stock were issued to our Board of Directors. We recorded compensation expense of $0.2 million and $2.5 million during the three and nine months ended September 30, 2023, respectively, related to the Deferred Compensation Plan. We recorded compensation expense of $0.2 million and $2.4 million during the three and nine months ended September 30, 2022, respectively, related to the Deferred Compensation Plan.
As of September 30, 2023, there were 228,105 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.
Employee Stock Purchase Plan
In 2007, the Company's Board of Directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to provide equity-based incentives to eligible employees. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of successive offering periods. Each offering period will be three months in duration and will begin on the first day of each calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of September 30, 2023, 217,081 shares of our common stock had been issued under the ESPP.
15. Accumulated Other Comprehensive Income
The following tables set forth the changes in accumulated other comprehensive income by component as of September 30, 2023 (in thousands):
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 loss on marketable securitiesTotal
Balance at December 31, 2022$47,800 $2,046 $(242)$49,604 
Other comprehensive income before reclassifications49,326 12,649 (1,525)60,450 
Amounts reclassified from accumulated other comprehensive income(29,175)(11,263)— (40,438)
Balance at September 30, 2023$67,951 $3,432 $(1,767)$69,616 
(1)Amount reclassified from accumulated other comprehensive income is included in interest expense in the respective consolidated statements of operations. As of September 30, 2023 and December 31, 2022, the deferred net gains from these terminated hedges, which is included in accumulated other comprehensive income relating to net unrealized gain (loss) on derivative instruments, was ($0.4 million)and ($0.5 million), respectively.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
(2)Amount reclassified from accumulated other comprehensive income is included in equity in net loss from unconsolidated joint ventures in the respective consolidated statements of operations.
16. Fair Value Measurements
We are required to disclose fair value information with regard to certain of 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 certain 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 as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023
TotalLevel 1Level 2Level 3
Assets:
Marketable securities available-for-sale$9,616 $— $9,616 $— 
Interest rate cap and swap agreements (included in Other assets)77,921 — 77,921 — 
Liabilities:
Interest rate cap and swap agreements (included in Other liabilities)$5,968 $— $5,968 $— 
December 31, 2022
TotalLevel 1Level 2Level 3
Assets:
Marketable securities available-for-sale$11,240 $— $11,240 $— 
Interest rate cap and swap agreements (included in Other assets)57,660 — 57,660 — 
Liabilities:
Interest rate cap and swap agreements (included in Other liabilities)$10,142 $— $10,142 $— 
We evaluate real estate investments and debt and preferred equity investments, including intangibles, for potential impairment 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 June 2023, the Company sold a 49.9% interest in its 245 Park Avenue investment, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of the 50.1% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of ($17.0 million) during the three and nine months ended September 30, 2023. The fair value of our investment was determined by the terms of the joint venture agreement.
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
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. 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, 2023 and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Carrying Value (1)
Fair Value
Carrying Value (1)
Fair Value
Debt and preferred equity investments$334,327 
(2)
$623,280 
(2)
Fixed rate debt$3,248,724 $3,188,552 $5,015,814 $4,784,691 
Variable rate debt120,148 118,264 520,148 519,669 
$3,368,872 $3,306,816 $5,535,962 $5,304,360 
(1)Amounts exclude net deferred financing costs.
(2)As of September 30, 2023, debt and preferred equity investments had an estimated fair value ranging between $0.3 billion and $0.3 billion. As of December 31, 2022, debt and preferred equity investments had an estimated fair value ranging between $0.6 billion and $0.6 billion.

Disclosures regarding fair value of financial instruments was based on pertinent information available to us as of September 30, 2023 and December 31, 2022. 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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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
17. Financial Instruments: Derivatives and Hedging
In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps, caps, collars and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging instruments.
The following table summarizes the notional value at inception and fair value of our consolidated derivative financial instruments as of September 30, 2023 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
Balance Sheet LocationFair
Value
Interest Rate Swap$200,000 4.739 %November 2022November 2023Other Assets$149 
Interest Rate Cap196,717 3.500 %November 2022November 2023Other Assets449 
Interest Rate Cap196,717 3.500 %November 2022November 2023Other Liabilities(449)
Interest Rate Swap150,000 2.600 %December 2021January 2024Other Assets1,061 
Interest Rate Swap200,000 4.490 %November 2022January 2024Other Assets447 
Interest Rate Swap200,000 4.411 %November 2022January 2024Other Assets488 
Interest Rate Cap370,000 3.250 %June 2023June 2024Other Assets5,526 
Interest Rate Cap370,000 3.250 %June 2023June 2024Other Liabilities(5,519)
Interest Rate Swap150,000 2.621 %December 2021January 2026Other Assets6,885 
Interest Rate Swap200,000 2.662 %December 2021January 2026Other Assets9,035 
Interest Rate Swap100,000 2.903 %February 2023February 2027Other Assets4,896 
Interest Rate Swap100,000 2.733 %February 2023February 2027Other Assets5,422 
Interest Rate Swap50,000 2.463 %February 2023February 2027Other Assets3,130 
Interest Rate Swap200,000 2.591 %February 2023February 2027Other Assets11,727 
Interest Rate Swap300,000 2.866 %July 2023May 2027Other Assets15,663 
Interest Rate Swap150,000 3.524 %January 2024May 2027Other Assets3,850 
Interest Rate Swap370,000 3.888 %November 2022June 2027Other Assets6,757 
Interest Rate Swap100,000 3.756 %January 2023January 2028Other Assets2,436 
$71,953 
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
During the three and nine months ended September 30, 2023, we recorded losses of $0.0 million and $0.2 million, respectively, based on the changes in the fair value of an interest rate cap we sold, which is included in Purchase price and other fair value adjustments in the consolidated statements of operations. During both the three and nine months ended September 30, 2022, we recorded a loss of $1.3 million based on the changes in the fair value of an interest rate cap we sold, which is included in Purchase price and other fair value adjustments in the consolidated statements of operations. During the three and nine months ended September 30, 2023, we recorded losses of $0.0 million and $0.2 million, respectively, on the changes in fair value, which is included in interest expense in the consolidated statements of operations. No gains or losses on the changes in fair value were included in interest expense in the consolidated statements of operations during the three and nine months ended September 30, 2022.
Certain agreements the Company has with each of its derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of September 30, 2023, the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $6.6 million. As of September 30, 2023, the Company was not required to post any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $6.6 million as of September 30, 2023.
Gains and losses on terminated hedges are included in accumulated other comprehensive income, and are recognized into earnings over the term of the related obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings. We estimate that ($46.8 million) of the current balance held in accumulated other comprehensive income will be reclassified into interest expense and ($13.8 million) of the portion related to our share of joint venture accumulated other comprehensive income will be reclassified into equity in net loss from unconsolidated joint ventures within the next 12 months.
The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of operations for the three months ended September 30, 2023 and 2022, respectively (in thousands):
 Amount of Gain Recognized in
Other Comprehensive (Loss) Income
Location of Gain Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain Reclassified from
Accumulated Other
Comprehensive Income into Income
Three Months Ended September 30,Three Months Ended September 30,
Derivative2023202220232022
Interest Rate Swaps/Caps$24,910 $44,057 Interest expense$11,422 $3,061 
Share of unconsolidated joint ventures' derivative instruments3,927 9,354 Equity in net loss from unconsolidated joint ventures4,616 (138)
$28,837 $53,411 $16,038 $2,923 
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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of operations for the nine months ended September 30, 2023 and 2022, respectively (in thousands):
 Amount of Gain Recognized in
Other Comprehensive (Loss) Income
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain Reclassified from
Accumulated Other
Comprehensive Income into Income
Nine Months Ended September 30,Nine Months Ended September 30,
Derivative2023202220232022
Interest Rate Swaps/Caps$52,624 $83,768 Interest expense$31,043 $(2,673)
Share of unconsolidated joint ventures' derivative instruments13,467 22,951 Equity in net loss from unconsolidated joint ventures11,986 (1,986)
$66,091 $106,719 $43,029 $(4,659)

The following table summarizes the notional value at inception and fair value of our joint ventures' derivative financial instruments as of September 30, 2023 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands).
Notional
Value
Strike
Rate
Effective
Date
Expiration
Date
ClassificationFair
Value
Interest Rate Cap$220,000 4.000 %February 2023February 2024Asset$1,097 
Interest Rate Cap410,070 0.490 %February 2022May 2024Asset14,040 
Interest Rate Cap410,070 0.490 %February 2022May 2024Asset14,035 
Interest Rate Cap505,412 3.000 %June 2023June 2024Asset8,524 
Interest Rate Cap272,000 4.000 %August 2023August 2024Asset3,176 
Interest Rate Cap434,816 3.500 %September 2023September 2024Asset8,781 
Interest Rate Swap250,000 3.608 %April 2023February 2026Asset6,305 
Interest Rate Swap250,000 3.608 %April 2023February 2026Asset6,299 
Interest Rate Swap177,000 1.555 %December 2022February 2026Asset12,655 
$74,912 

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
18. Lease Income
The Operating Partnership is the lessor and the sublessor to tenants under operating and sales-type leases. The minimum rental amounts due under the leases are generally subject to scheduled fixed increases or adjustments. The leases generally also require that the tenants reimburse us for increases in certain operating costs and real estate taxes above their base year costs.
The components of lease income from operating leases during the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Fixed lease payments$131,664 $142,778 $457,454 $416,033 
Variable lease payments19,467 19,990 60,211 58,283 
Total lease payments (1)
$151,131 $162,768 $517,665 $474,316 
Amortization of acquired above and below-market leases(140)184 14,313 (101)
Total rental revenue$150,991 $162,952 $531,978 $474,215 
(1)Amounts include $49.7 million and $147.4 million of sublease income during the three and nine months ended September 30, 2023 and $55.7 million and $169.9 million of sublease income during the three and nine months ended September 30, 2022, respectively.
The components of lease income from sales-type leases during the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Interest income (1)
$1,113 $1,099 $3,328 $3,286 
(1)These amounts are included in Other income in our consolidated statements of operations.

19. Commitments and Contingencies
Legal Proceedings
As of September 30, 2023, the Company and the Operating Partnership were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined could have a material adverse impact on us.
Environmental Matters
Our management believes that the properties are in compliance in all material respects with applicable Federal, state and local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.
Notes to Consolidated Financial Statements (cont.)
September 30, 2023
(unaudited)
20. Segment Information
The Company has two reportable segments, real estate and debt and preferred equity investments. We evaluate real estate performance and allocate resources based on earnings contributions.
The primary sources of revenue are generated from tenant rents, escalations and reimbursement revenue. Real estate property operating expenses consist primarily of security, maintenance, utility costs, insurance, real estate taxes and, at certain properties, ground rent expense. See Note 5, "Debt and Preferred Equity Investments," for additional details on our debt and preferred equity investments.
Selected consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, and selected asset information as of September 30, 2023 and December 31, 2022, regarding our operating segments are as follows (in thousands):
Real Estate SegmentDebt and Preferred Equity SegmentTotal Company
Total revenues
Three months ended:
September 30, 2023$163,531 $9,689 $173,220 
September 30, 2022$182,943 $29,513 $212,456 
Nine months ended:
September 30, 2023$590,016 $27,849 $617,865 
September 30, 2022$532,057 $69,808 $601,865 
Net (loss) income
Three months ended:
September 30, 2023$(22,282)$588 $(21,694)
September 30, 2022$(8,934)$21,145 $12,211 
Nine months ended:
September 30, 2023$(446,005)$6,726 $(439,279)
September 30, 2022$(65,824)$53,571 $(12,253)
Total assets
As of:
September 30, 2023$9,354,243 $336,339 $9,690,582 
December 31, 2022$11,727,418 $628,376 $12,355,794 
We also allocate loan loss reserves, net of recoveries, and transaction related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses to the debt and preferred equity segment because that segment does not have dedicated personnel and the use of personnel and resources is dependent on transaction volume between the two segments and varies between periods. In addition, we base performance on the individual segments prior to allocating marketing, general and administrative expenses. For the three and nine months ended September 30, 2023, marketing, general and administrative expenses totaled $22.9 million and $69.1 million. For the three months ended September 30, 2022, marketing, general and administrative expenses totaled $21.3 million and $69.6 million. All other expenses, except interest, relate entirely to the real estate assets.
There were no transactions between the above two segments.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, primarily engaged in the acquisition, development, redevelopment, repositioning, ownership, management and operation of commercial real estate properties, principally office properties, located in the New York metropolitan area, principally Manhattan. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.
The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in this Quarterly Report on this Form 10-Q and in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.
As of September 30, 2023, 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:
ConsolidatedUnconsolidatedTotal
LocationProperty
Type
Number of BuildingsApproximate Square Feet (unaudited)Number of BuildingsApproximate Square Feet (unaudited)Number of BuildingsApproximate Square Feet (unaudited)Weighted Average Leased Occupancy (1) (unaudited)
Commercial:
ManhattanOffice13 8,399,141 12 15,412,174 25 23,811,315 89.3 %
Retail17,888 294,865 10 312,753 91.0 %
Development/Redevelopment(1)(2)1,466,419 2,893,357 4,359,776 N/A
19 9,883,448 23 18,600,396 42 28,483,844 N/A
SuburbanOffice862,800 — — 862,800 77.4 %
Total commercial properties26 10,746,248 23 18,600,396 49 29,346,644 N/A
Residential:
ManhattanResidential(2)140,382 221,884 362,266 99.0 %
Total portfolio27 10,886,630 24 18,822,280 51 29,708,910 N/A
(1)The weighted average leased occupancy for commercial properties represents the total leased square footage divided by the total square footage at acquisition. The weighted average leased occupancy for residential properties represents the total leased units divided by the total available units. Properties under construction are not included in the calculation of weighted average leased occupancy.
(2)As of September 30, 2023, we owned a building at 7 Dey Street / 185 Broadway that was comprised of approximately 140,382 square feet (unaudited) of residential space and approximately 50,206 square feet (unaudited) of office and retail space that is under development. For the purpose of this report, we have included this building in the number of residential properties we own. However, we have included only the residential square footage in the residential approximate square footage, and have listed the balance of the square footage as development square footage.
As of September 30, 2023, we also managed one office building owned by a third party encompassing approximately 0.3 million square feet (unaudited), and held debt and preferred equity investments with a book value excluding the impact of credit losses of $334.3 million, excluding approximately $8.3 million of debt and preferred equity investments and other financing receivables that are included in other balance sheet line items other than the Debt and preferred equity investments line item.
Critical Accounting Policies and Estimates
Refer to the 2022 Annual Report on Form 10-K of the Company and the Operating Partnership for a discussion of our critical accounting policies and estimates, which include investment in commercial real estate properties, investment in unconsolidated joint ventures, lease classification, revenue recognition, and debt and preferred equity investments. During the three and nine months ended September 30, 2023, there were no material changes to these policies.
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Results of Operations
Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022
The following comparison for the three months ended September 30, 2023, or 2023, to the three months ended September 30, 2022, or 2022, makes reference to the effect of the following:
i.“Same-Store Properties,” which represents all operating properties owned by us at January 1, 2022 and still owned by us in the same manner as of September 30, 2023 (Same-Store Properties totaled 20 of our 27 consolidated operating buildings),
ii.“Acquisition Properties,” which represents all properties or interests in properties acquired in 2023 and 2022 and all non-Same-Store Properties, including properties that are under development or redevelopment,
iii."Disposed Properties," which represents all properties or interests in properties sold in 2023 and 2022, and
iv.“Other,” which represents properties where we sold an interest resulting in deconsolidation and corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.
 Same-StoreDisposedOtherConsolidated
(in millions)20232022$
Change
%
Change
202320222023202220232022$
Change
%
Change
Rental revenue$136.6 $139.1 $(2.5)(1.8)%$— $— $14.4 $23.9 $151.0 $163.0 $(12.0)(7.4)%
Investment income— — — — %— — 9.7 29.5 9.7 29.5 (19.8)(67.1)%
Other income2.2 2.6 (0.4)(15.4)%— — 10.3 17.4 12.5 20.0 (7.5)(37.5)%
Total revenues138.8 141.7 (2.9)(2.0)%— — 34.4 70.8 173.2 212.5 (39.3)(18.5)%
Property operating expenses71.4 68.7 2.7 3.9 %— 0.3 16.6 18.5 88.0 87.5 0.5 0.6 %
Transaction related costs— — — — %— — 0.2 0.3 0.2 0.3 (0.1)(33.3)%
Marketing, general and administrative— — — — %— — 22.9 21.3 22.9 21.3 1.6 7.5 %
71.4 68.7 2.7 3.9 %— 0.3 39.7 40.1 111.1 109.1 2.0 1.8 %
Other income (expenses):
Interest expense and amortization of deferred financing costs, net of interest income(29.6)(23.9)(5.7)23.8 %
Depreciation and amortization(50.2)(48.5)(1.7)3.5 %
Equity in net loss from unconsolidated joint ventures(15.1)(22.0)6.9 (31.4)%
Purchase price and other fair value adjustments10.2 (1.1)11.3 (1,027.3)%
Gain on sale of real estate, net0.5 4.3 (3.8)(88.4)%
Depreciable real estate reserves and impairment0.4 — 0.4 100.0 %
Net (loss) income$(21.7)$12.2 $(33.9)(277.9)%
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Rental Revenue
Rental revenues decreased primarily due to the deconsolidation of 245 Park Avenue as a result of the sale of a joint venture interest during the second quarter of 2023 ($9.2 million).
The following table presents a summary of the commenced leasing activity for the three months ended September 30, 2023 in our Manhattan portfolio:
 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 period2,789,889      
Space which became available during the period (3)
     
•       Office
114,470       
•       Retail
2,900       
•       Storage
3,328       
 120,698       
Total space available2,910,587       
Leased space commenced during the period:       
•       Office(4)
144,906 153,969 $79.49 $87.56 $44.31 4.6 5.0 
•       Retail
1,674 1,916 $178.50 $195.87 $— 4.0 13.7 
•       Storage
3,018 2,978 $22.68 $20.38 $— — 3.9 
Total leased space commenced149,598 158,863 $79.62 $88.07 $42.95 4.6 5.1 
Total available space at end of period2,760,989       
Early renewals      
•       Office135,912 145,480 $82.01 $85.36 $21.54 5.4 4.8 
•       Retail7,201 6,234 $320.82 $325.47 $— — 2.0 
Total early renewals143,113 151,714 $91.82 $95.23 $20.66 5.2 4.7 
Total commenced leases, including replaced previous vacancy  
•       Office299,449 $80.71 $86.10 $33.25 5.0 4.9
•       Retail 8,150 $287.36 $295.00 $— 0.9 4.7
•       Storage 2,978 $22.68 $20.38 $— — 3.9 
Total commenced leases 310,577 $85.58 $92.80 $32.06 4.9 4.9 
(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 $84.86 per rentable square feet for 73,484 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $82.96 per rentable square feet for 218,964 rentable square feet.

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Investment Income
Investment income decreased due to a lower weighted average debt and preferred equity investment balance and a lower weighted average yield for the three months ended September 30, 2023 as compared to the same period in 2022, and due to the recognition of previously unrecorded default interest on our preferred equity investment at 245 Park Avenue in the third quarter of 2022. For the three months ended September 30, 2023, the weighted average debt and preferred equity investment balance outstanding and weighted average yield were $608.7 million and 6.2%, respectively, as compared to $995.0 million and 11.7%, respectively, for the three months ended September 30, 2022.
Other Income
Other income decreased due to reduced lease termination income ($2.5 million) and lower management, leasing and construction fee income ($1.4 million) during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.
Property Operating Expenses
Property operating expenses increased due primarily to increased variable expenses at our Acquired and Same-Store Properties ($3.8 million and $2.6 million, respectively), offset by the sale of a joint venture interest and deconsolidation of 245 Park Avenue in the second quarter of 2023 ($4.0 million).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses increased to $22.9 million for three months ended September 30, 2023, as compared to $21.3 million for the same period in 2022 due to the timing of compensation related expenses.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, increased due to rising SOFR rates, higher interest expense from unsecured corporate term loans ($12.4 million) and the revolving credit facility ($6.5 million) during three months ended September 30, 2023 compared to the three months ended September 30, 2022. These increases were offset primarily by repayments of unsecured bonds ($5.9 million) in the third quarter of 2022, the deconsolidation of 245 Park Avenue in the second quarter of 2023 ($4.4 million), and a decrease in interest capitalization in connection with properties that are under development ($3.6 million). The weighted average consolidated debt balance outstanding was $3.9 billion for the three months ended September 30, 2023, compared to $4.4 billion for the three months ended September 30, 2022. The consolidated weighted average interest rate was 5.06% for the three months ended September 30, 2023, as compared to 3.57% for the three months ended September 30, 2022.
Depreciation and Amortization
Depreciation and amortization increased at our Acquired Properties ($3.5 million) and Same-Store Properties ($1.0 million) during the three months ended September 30, 2023, partially offset by the deconsolidation of 245 Park Avenue ($2.6 million) as a result of the interest sale during the second quarter of 2023.
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures decreased as a result of an increase in income from operations at One Vanderbilt Avenue ($13.3 million) and 245 Park ($5.4 million) and the conversion of previous mezzanine debt investments into a 90.43% ownership in the fee interest at 625 Madison ($10.0 million), offset by increased interest expense across our joint venture portfolio ($20.8 million).
Purchase price and other fair value adjustments
During the three months ended September 30, 2023, we recorded a $10.2 million purchase price adjustment related to a previous transaction. During the three months ended September 30, 2022, we recorded a $1.1 million fair value adjustment related to derivatives that are not designated as hedges.
Gain on sale of real estate, net
Gain on sale of real estate, net remained relatively flat for the three months ended September 30, 2023 as compared to the same period in 2022, as we did not dispose of any properties.

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Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022
The following comparison for the nine months ended September 30, 2023, or 2023, to the nine months ended September 30, 2022, or 2022, makes reference to the effect of the following:
i.“Same-Store Properties,” which represents all operating properties owned by us at January 1, 2022 and still owned by us in the same manner as of September 30, 2023 (Same-Store Properties totaled 20 of our 27 consolidated operating properties),
ii.“Acquisition Properties,” which represents all properties or interests in properties acquired in 2023 and 2022 and all non-Same-Store Properties, including properties that are under development, redevelopment or were deconsolidated during the period,
iii."Disposed Properties," which represents all properties or interests in properties sold or partially sold in 2023 and 2022, 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-StoreDisposedOtherConsolidated
(in millions)20232022$
Change
%
Change
202320222023202220232022$
Change
%
Change
Rental revenue$411.8 $419.4 $(7.6)(1.8)%$— $0.9 $120.2 $53.9 $532.0 $474.2 $57.8 12.2 %
Investment income— — — — %— — 27.8 69.8 27.8 69.8 (42.0)(60.2)%
Other income3.0 3.6 (0.6)(16.7)%— 10.4 55.0 43.8 58.0 57.8 0.2 0.3 %
Total revenues414.8 423.0 (8.2)(1.9)%— 11.3 203.0 167.5 617.8 601.8 16.0 2.7 %
Property operating expenses207.0 198.3 8.7 4.4 %0.2 1.9 74.1 44.0 281.3 244.2 37.1 15.2 %
Transaction related costs— — — — %— — 1.1 0.3 1.1 0.3 0.8 266.7 %
Marketing, general and administrative— — — — %— — 69.1 69.6 69.1 69.6 (0.5)(0.7)%
207.0 198.3 8.7 4.4 %0.2 1.9 144.3 113.9 351.5 314.1 37.4 11.9 %
Other income (expenses):
Interest expense and amortization of deferred financing costs, net of interest income(116.0)(57.8)(58.2)100.7 %
Depreciation and amortization(197.8)(142.4)(55.4)38.9 %
Equity in net loss from unconsolidated joint ventures(44.5)(31.3)(13.2)42.2 %
Equity in net loss on sale of interest in unconsolidated joint venture/real estate(0.1)(0.1)— — %
Purchase price and other fair value adjustments(7.0)(7.3)0.3 (4.1)%
Loss on sale of real estate, net(27.8)(61.1)33.3 (54.5)%
Depreciable real estate reserves and impairment(305.5)— (305.5)100.0 %
Loan loss and other investment reserves, net of recoveries(6.9)— (6.9)100.0 %
Net loss$(439.3)$(12.3)$(427.0)3,471.5 %
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Rental Revenue
Rental revenues increased due primarily to the acquisition of 245 Park Avenue ($67.8 million) during the third quarter of 2022 and prior to its deconsolidation as a result of the sale of a joint venture interest during the second quarter of 2023, offset by a lower contribution from our Same-Store Properties ($7.5 million).
The following table presents a summary of the commenced leasing activity for the nine months ended September 30, 2023 in our Manhattan and Suburban portfolio:
 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 period2,227,978      
Property out of redevelopment51,490 
Property in redevelopment(56,718)
Space which became available during the period (3)
     
•       Office
1,065,826       
•       Retail
32,666       
•       Storage
10,825       
 1,109,317       
Total space available3,332,067       
Leased space commenced during the period:       
•       Office(4)
560,288 603,951 $76.97 $77.32 $59.86 7.0 6.0 
•       Retail4,575 4,811 $226.98 $195.87 $519.64 6.5 14.9 
•       Storage6,215 8,236 $28.00 $17.25 $— 3.3 9.9 
Total leased space commenced571,078 616,998 $77.48 $76.86 $62.65 6.9 6.1 
Total available space at end of period2,760,989       
Early renewals      
•       Office516,646 573,863 $72.56 $71.37 $27.93 4.3 5.3 
•       Retail15,592 15,751 $209.41 $206.75 $— — 5.0 
•       Storage5,146 5,554 $31.46 $33.07 $— 3.6 6.0 
Total early renewals537,384 595,168 $75.80 $74.59 $26.93 4.2 5.3 
Total commenced leases, including replaced previous vacancy  
•       Office1,177,814 $74.82 $73.81 $44.30 5.7 5.7 
•       Retail 20,562 $213.52 $205.57 $121.58 1.5 7.3 
•       Storage 13,790 $29.39 $24.30 $— 3.4 8.4 
Total commenced leases1,212,166 $76.66 $75.51 $45.11 5.6 5.7 
(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 $78.24 per rentable square feet for 399,048 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $74.89 per rentable square feet for 972,911 rentable square feet.
Investment Income
Investment income decreased due to a lower weighted average debt and preferred equity investment balance and a lower weighted average yield for the nine months ended September 30, 2023 as compared to the same period in 2022 and due to the recognition of previously unrecorded default interest on our preferred equity investment at 245 Park Avenue in the third quarter of 2022. For the nine months ended September 30, 2023, the weighted average debt and preferred equity investment balance outstanding and weighted average yield were $632.3 million and 5.9%, respectively, as compared to $1.1 billion and 8.7%, respectively, for the nine months ended September 30, 2022.
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Other Income
Other income increased due to SUMMIT One Vanderbilt operations ($6.5 million) and fee income related to the 49.9% joint venture interest sale of 245 Park Avenue ($4.7 million). This increase was offset by income related to the resolution of the Company's investment in 1591-1597 Broadway ($5.0 million) and fee income related to the acquisition of 450 Park Avenue ($4.7 million) during the nine months ended September 30, 2022, and lower lease termination income ($1.2 million) during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.
Property Operating Expenses
Property operating expenses increased primarily due to acquiring 245 Park Avenue ($23.2 million) in the third quarter of 2022 and prior to its deconsolidation in the second quarter of 2023, increased variable expenses ($6.3 million) and real estate taxes ($2.4 million) at our Same-Store Properties, and increased variable expenses at our Acquired Properties ($6.0 million), partially offset by decreased variable expenses at our Disposed Properties ($1.2 million).
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses decreased to $69.1 million for the nine months ended September 30, 2023, compared to $69.6 million for the same period in 2022, due to lower compensation related expenses.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, increased due to rising LIBOR and SOFR rates, higher interest expense from unsecured corporate term loans ($32.3 million) and the revolving credit facility ($19.1 million) during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, acquiring 245 Park Avenue in the third quarter of 2022 ($25.6 million) prior to its deconsolidation in the second quarter of 2023, and the refinancing of 100 Church ($7.6 million) in the second quarter of 2022. These increases were offset primarily by repayments of unsecured bonds ($20.3 million) in the third quarter of 2022, and a decrease in interest capitalization in connection with properties that are under development ($3.9 million). The weighted average consolidated debt balance outstanding was $5.0 billion for the nine months ended September 30, 2023, compared to $4.2 billion for the nine months ended September 30, 2022. The consolidated weighted average interest rate was 4.64% for the nine months ended September 30, 2023, as compared to 3.28% for the nine months ended September 30, 2022.
Depreciation and Amortization
Depreciation and amortization increased primarily due to acquiring 245 Park Avenue ($45.8 million) in the third quarter of 2022 and prior to its deconsolidation in the second quarter of 2023, an increase at our Acquired Properties ($7.7 million) and Same-Store Properties ($2.1 million) during the nine months ended September 30, 2023.
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures increased as a result of increased interest expense across our joint venture portfolio ($50.7 million) and a decrease in income from operations at 919 Third Avenue ($7.8 million) due to a large tenant expiration in February 2023. This was partially offset by an increase at 2 Herald Square ($26.7 million) primarily due to holdover rent, interest, settlement income, lease termination income and reimbursement of attorneys' fees collected following the completion of legal proceedings against a former tenant and its guarantor as well as an increase in income from operations at One Vanderbilt Avenue ($16.1 million).
Equity in net loss on sale of interest in unconsolidated joint venture/real estate
During the nine months ended September 30, 2023, we recognized a loss on the sale of our interest in 121 Greene Street. During the nine months ended September 30, 2022, we recognized a loss on the sale of our interest in the Stonehenge Portfolio.
Purchase price and other fair value adjustments
During the nine months ended September 30, 2023, we recorded a $17.0 million fair value adjustment relating to the 50.1% interest we retained in 245 Park Avenue, which was deconsolidated when a 49.9% joint venture interest was sold. This was partially offset by a $10.2 million purchase price adjustment related to a previous transaction. During the nine months ended September 30, 2022, we recorded a $6.1 million fair value adjustment related to an investment in marketable securities and a $1.3 million fair value adjustment related to derivatives that are not designated as hedges.
Loss on sale of real estate, net
During the nine months ended September 30, 2023, we recognized a loss on the sale of a 49.9% joint venture interest in 245 Park Avenue ($28.3 million). During the nine months ended September 30, 2022, we recognized losses on the sales of 609 Fifth Avenue ($80.2 million) and 707 Eleventh Avenue ($0.8 million), offset by a gain on the sale of 1080 Amsterdam Avenue ($17.9 million).
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Depreciable real estate reserves and impairment
During the nine months ended September 30, 2023, we recognized depreciable real estate reserves and impairments related to our leasehold interest at 625 Madison Avenue ($305.9 million) following a strategic review of the property that addressed a range of relevant considerations, including the increase in ground rent to an amount substantially above what the Company believed was appropriate. During the nine months ended September 30, 2022, we did not recognize any depreciable real estate reserves.
Loan loss and other investment reserves, net of recoveries
During the nine months ended September 30, 2023, we recorded $6.9 million of loan loss reserve on one debt and preferred equity investment. During the nine months ended September 30, 2022, we did not recognize any loan loss and other investment reserves.
Liquidity and Capital Resources
We currently expect that the principal sources of funds to meet our short-term and long-term liquidity requirements for working capital, development or redevelopment of properties, tenant improvements, leasing costs, dividends to shareholders, distributions to unitholders, repurchases or repayments of outstanding indebtedness, acquisitions, share repurchases and for debt and preferred equity investments will include:
(1)Cash flow from operations;
(2)Cash on hand;
(3)Net proceeds from divestitures of properties and redemptions, participations, dispositions and repayments of debt and preferred equity investments;
(4)Borrowings under the revolving 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).
Cash flow from operations is primarily dependent upon the collectability of rent, the occupancy level of our portfolio, the net effective rental rates achieved on our leases, operating escalations and recoveries from our tenants and the level of operating and other costs. We also believe that our ability to generate third-party fees and the debt and preferred equity investment program will continue to serve as a supplemental source of operating cash flow.
The combined aggregate principal maturities of mortgages and other loans payable, the 2021 credit facility, 2022 term loan, senior unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension options and put options, estimated interest expense, and our obligations under our financing and operating leases, as of September 30, 2023 are as follows (in thousands):
Remaining 20232024202520262027ThereafterTotal
Property mortgages and other loans$261,635 $337,237 $370,000 $— $550,000 $— $1,518,872 
Revolving credit facility— — — — 400,000 — 400,000 
Unsecured term loans— 200,000 — — 1,000,000 50,000 1,250,000 
Senior unsecured notes— — 100,000 — — — 100,000 
Trust preferred securities— — — — — 100,000 100,000 
Financing leases784 3,180 3,228 3,276 3,325 200,169 213,962 
Operating leases14,162 58,068 58,207 58,347 58,358 1,334,569 1,581,711 
Estimated interest expense41,348 154,931 115,836 88,188 27,380 43,104 470,787 
Joint venture debt525,028 1,318,885 1,618,381 563,977 1,189,059 2,130,404 7,345,734 
Total$842,957 $2,072,301 $2,265,652 $713,788 $3,228,122 $3,858,246 $12,981,066 
We estimate that for the remainder of the year ending December 31, 2023, we expect to incur $19.5 million of recurring capital expenditures on existing consolidated properties and $26.5 million of development or redevelopment expenditures on existing consolidated properties, of which $0.4 million will be funded by construction financing facilities or loan reserves. We expect our share of capital expenditures at our joint venture properties will be $62.9 million, of which $50.1 million will be funded by construction financing facilities or loan reserves.
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As of September 30, 2023, we had liquidity of $1.0 billion, comprised of $850.0 million of availability under our revolving credit facility and $199.4 million of consolidated cash on hand, inclusive of $9.6 million of marketable securities. This liquidity excludes $165.8 million representing our share of cash at unconsolidated joint venture properties. We may seek to divest of properties, interests in properties or debt and preferred equity investments or access private and public debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt obligations, as described above, upon maturity, if not before.
We have investments in several real estate joint ventures with various partners who are generally considered to be financially stable. Most of our joint ventures are financed with non-recourse debt. We believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.
Cash Flows
The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1. Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.
Cash, restricted cash, and cash equivalents were $309.3 million and $385.1 million as of September 30, 2023 and 2022, respectively, representing a decrease of $75.8 million. The decrease was a result of the following changes in cash flows (in thousands):
Nine Months Ended September 30,
20232022Change
Net cash provided by operating activities$181,338 $249,628 $(68,290)
Net cash provided by investing activities271,684 273,314 (1,630)
Net cash used in financing activities(527,753)(474,848)(52,905)
Our principal sources of operating cash flow are the properties in our consolidated and joint venture portfolios, third-party fees and our debt and preferred equity portfolio. These sources generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund dividend and distribution requirements.
Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings that meet our investment criteria. During the nine months ended September 30, 2023, when compared to the nine months ended September 30, 2022, we used cash primarily for the following investing activities (in thousands):
Acquisitions of real estate$64,491 
Capital expenditures and capitalized interest962 
Acquisition deposits and deferred purchase price(75,400)
Joint venture investments27,076 
Distributions from joint ventures16,667 
Proceeds from sales of real estate/partial interest in property193,752 
Cash and restricted cash assumed from acquisition of real estate investment(60,494)
Debt and preferred equity and other investments(168,684)
Decrease in net cash provided by investing activities$(1,630)
Funds spent on capital expenditures, which are comprised of building and tenant improvements, decreased from $195.0 million for the nine months ended September 30, 2022 to $194.0 million for the nine months ended September 30, 2023 due to decreased spending on development and redevelopment properties.
We generally fund our investment activity through the sale of real estate, the sale or repayment of debt and preferred equity investments, property-level financing, our corporate credit facilities, or construction facilities. From time to time, the Company may issue common or preferred stock or equity-linked securities, or the Operating Partnership may issue common or preferred units of limited partnership interest.
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During the nine months ended September 30, 2023, when compared to the nine months ended September 30, 2022, we used cash for the following financing activities (in thousands):
Proceeds from our debt obligations$(1,147,980)
Repayments of our debt obligations842,596 
Net distribution to noncontrolling interests(45,620)
Other financing activities86,514 
Proceeds from stock options exercised and DRSPP issuance100 
Repurchase of common stock151,197 
Redemption of preferred stock6,267 
Acquisition of subsidiary interest from noncontrolling interest29,817 
Dividends and distributions paid24,204 
Increase in net cash used in financing activities$(52,905)
Capitalization
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, $0.01 par value per share. As of September 30, 2023, 64,397,983 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 $1.0 billion share repurchase program under which we can buy shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of 2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
As of September 30, 2023, share repurchases executed under the program, excluding the redemption of OP units, were as follows:
Period
Shares repurchased(1)
Average price paid per share
Cumulative number of shares repurchased as part of the repurchase plan or programs
Year ended 20208,276,032$64.3029,661,978
Year ended 20214,474,649$75.4434,136,627
Year ended 20221,971,092$76.6936,107,719
(1)There were no share repurchases during the nine months ended September 30, 2023.
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Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
In February 2021, 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 months ended September 30, 2023 and 2022, respectively (dollars in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Shares of common stock issued2,695 2,933 14,736 5,827 
Dividend reinvestments/stock purchases under the DRSPP$97 $140 $439 $339 
Fifth Amended and Restated 2005 Stock Option and Incentive Plan
The Fifth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's Board of Directors in April 2022 and its stockholders in June 2022 at the Company's annual meeting of stockholders. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 32,210,000 fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based awards under the 2005 Plan. As of September 30, 2023, 4.0 million fungible units were available for issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, and phantom stock units granted pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.
Deferred Compensation Plan for Directors
During the nine months ended September 30, 2023, 37,112 phantom stock units and 27,739 shares of common stock were issued to our Board of Directors. We recorded compensation expense of $0.2 million and $2.5 million during the three and nine months ended September 30, 2023, respectively, related to the Deferred Compensation Plan. We recorded compensation expense of $0.2 million and $2.4 million during the three and nine months ended September 30, 2022, respectively, related to the Deferred Compensation Plan.
As of September 30, 2023, there were 228,105 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.
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Indebtedness
The table below summarizes our consolidated mortgages and other loans payable, 2021 credit facility, 2022 term loan, senior unsecured notes and trust preferred securities outstanding as of September 30, 2023 and December 31, 2022, (amounts in thousands).
Debt Summary:September 30, 2023December 31, 2022
Balance
Fixed rate$928,724 $2,695,814 
Variable rate—hedged2,320,000 2,320,000 
Total fixed rate3,248,724 5,015,814 
Total variable rate120,148 520,148 
Total debt$3,368,872 $5,535,962 
Debt, preferred equity, and other investments subject to variable rate$158,430 $144,056 
Net exposure to variable rate debt(38,282)376,092 
Percent of Total Debt:
Fixed rate96.4 %90.6 %
Variable rate (1)
3.6 %9.4 %
Total100.0 %100.0 %
Effective Interest Rate for the Year:
Fixed rate4.61 %3.60 %
Variable rate5.89 %3.23 %
Effective interest rate4.64 %3.55 %
(1)    Inclusive of the mitigating effect of our debt, preferred equity, and other investments subject to variable rates, the percent of total debt of our net exposure to variable rate debt was (1.2)% and 7.0% as of September 30, 2023 and December 31, 2022, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.00% and 4.39% as of September 30, 2023 and December 31, 2022, respectively), and adjusted Term SOFR (5.32% and 4.30% as of September 30, 2023 and December 31, 2022, respectively). Our consolidated debt as of September 30, 2023 had a weighted average term to maturity of 2.82 years.
Certain of our debt and equity investments and other investments, with carrying values of $158.4 million as of September 30, 2023 and $144.1 million as of December 31, 2022, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net ratio of our variable rate debt to total debt was (1.2)% and 7.0% as of September 30, 2023 and December 31, 2022, respectively.
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was previously amended by the Company in November 2017, and was originally entered into by the Company in November 2012. As of September 30, 2023, the 2021 credit facility consisted of a $1.25 billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan B") with maturity dates of May 15, 2026, May 15, 2027, and November 21, 2024, respectively. The revolving credit facility has two six-month, as-of-right extension options to May 15, 2027. 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, 2023, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans under the revolving credit facility, (ii) 80 basis points to 160 basis points for loans under Term Loan A, and (iii) 85 basis points to 165 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 instances where there are either only two ratings available or where there are more than two and the difference between them is one rating category, the applicable rating shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the average is not a recognized category.
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As of September 30, 2023, the applicable spread over adjusted Term SOFR plus 10 basis points for the 2021 credit facility was 140 basis points for the revolving credit facility, 160 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, 2023, the facility fee was 30 basis points.
As of September 30, 2023, we had $2.0 million of outstanding letters of credit, $400.0 million drawn under the revolving credit facility and $1.25 billion outstanding under the term loan facilities, with total undrawn capacity of $850.0 million under the 2021 credit facility. As of September 30, 2023 and December 31, 2022, the revolving credit facility had a carrying value of $394.4 million and $443.2 million, respectively, net of deferred financing costs. As of September 30, 2023 and December 31, 2022, the term loan facilities had a carrying value of $1.2 billion and $1.2 billion, respectively, net of deferred financing costs.
The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2021 credit facility.
The 2021 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
2022 Term Loan
In October 2022, we entered into a term loan agreement, referred to as the 2022 term loan. In September 2023, the 2022 term loan was repaid in full. The 2022 term loan consisted of a $425.0 million term loan with a maturity date of October 6, 2023. The 2022 term loan had one six-month as-of-right extension option to April 6, 2024. We also had an option, subject to customary conditions, to increase the capacity of the 2022 term loan to $500.0 million on or before January 7, 2023 without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions. In January 2023, the 2022 term loan was increased by $25.0 million to $425.0 million.
The 2022 term loan bore interest at a spread over adjusted Term SOFR plus 10 basis points, ranging from 100 basis points to 180 basis points, in each case based on the credit rating assigned to the senior unsecured long-term indebtedness of the Company. In instances where there were either only two ratings available or where there was more than two and the difference between them was one rating category, the applicable rating was the highest rating. In instances where there were more than two ratings and the difference between the highest and the lowest were two or more rating categories, then the applicable rating used was the average of the highest two, rounded down if the average was not a recognized category. As of December 31, 2022, the 2022 term loan had a carrying value of $398.2 million, net of deferred financing costs.
The Company and the Operating Partnership were borrowers jointly and severally obligated under the 2022 term loan.
Restrictive Covenants
The terms of the 2021 credit facility and 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, 2023 and December 31, 2022, we were in compliance with all such covenants.
Interest Rate Risk
We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate fluctuations are managed through the use of interest rate derivative instruments and through our variable rate debt and preferred equity investments. Based on the debt outstanding as of September 30, 2023, a hypothetical 100 basis point increase in the floating rate interest rate curve would reduce our consolidated annual interest cost, net of interest income from variable rate debt and preferred equity investments, by $0.4 million and would increase our share of joint venture annual interest cost by $12.2 million. As of September 30, 2023, $0.2 billion of our debt and preferred equity portfolio was indexed to SOFR.
We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings.
Our consolidated long-term debt of $3.2 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of September 30, 2023 bore interest based on a spread to LIBOR of 145 basis points and Term SOFR of 50 basis points to 569 basis points.
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Off-Balance Sheet Arrangements
We have off-balance sheet investments, including joint ventures and debt and preferred equity investments. These investments all have varying ownership structures. A majority of our joint venture arrangements are accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated financial statements.
Dividends/Distributions
We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership.
To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined before taking into consideration the dividends paid deduction and net capital gains.
Any dividend we pay may be in the form of cash, stock or a combination thereof, subject to IRS limitations on the use of stock for dividends. Additionally, if our REIT taxable income in a particular year exceeds the amount of cash dividends we pay in that year, we may pay stock dividends in order to maintain our REIT status and avoid certain REIT-level taxes.
Before we pay any cash dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under the 2021 credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.
Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR")), within two property insurance programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain assets, such as development projects. Additionally, one of our captive insurance companies, Belmont Insurance Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments. However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants requiring us to maintain insurance and we could default under our debt instruments if the cost and/or availability of certain types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont and Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be maintained or adequately cover our risk of loss.
Funds from Operations
FFO is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than the Company does. The revised White Paper on FFO approved by the Board of Governors of NAREIT in April 2002, and subsequently amended in December 2018, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties and real estate related impairment charges, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.
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The Company presents FFO because it considers it an important supplemental measure of the Company’s operating performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, particularly those that own and operate commercial office properties. The Company also uses FFO as one of several criteria to determine performance-based compensation for members of its senior management. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions, and real estate related impairment charges, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, and interest costs, providing perspective not immediately apparent from net income. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including our ability to make cash distributions.
FFO for the three and nine months ended September 30, 2023 and 2022 are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net (loss) income attributable to SL Green common stockholders$(23,967)$7,377 $(423,892)$(28,748)
Add:
Depreciation and amortization50,212 48,462 197,844 142,359 
Joint venture depreciation and noncontrolling interest adjustments76,539 63,890 211,222 185,352 
Net (income) loss attributable to noncontrolling interests(3,368)(502)(31,952)438 
Less:
Equity in net loss on sale of interest in unconsolidated joint venture/real estate — (79)(131)
Depreciable real estate reserves and impairment389 — (305,527)— 
Gain (loss) on sale of real estate, net516 4,276 (27,813)(61,104)
Purchase price and other fair value adjustments10,200 — (6,813)— 
Depreciation on non-rental real estate assets572 709 1,806 1,845 
Funds from Operations attributable to SL Green common stockholders and unit holders
$87,739 $114,242 $291,648 $358,791 
Cash flows provided by operating activities$77,346 $67,193 $181,338 $249,628 
Cash flows provided by investing activities310,552 137,990 271,684 273,314 
Cash flows used in financing activities(389,634)(97,166)(527,753)(474,848)
Inflation
Substantially all of our office leases provide for separate real estate tax and operating expense escalations as well as operating expense recoveries based on increases in the CPI or other measures such as porters' wage. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases will be at least partially offset by the contractual rent increases and expense escalations described above.
Accounting Standards Updates
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies-Accounting Standards Updates" in the accompanying consolidated financial statements.
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Forward-Looking Information
This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York metropolitan area markets, business strategies, expansion and growth of our operations and other similar matters, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.
Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.
Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. These risks and uncertainties include:
the effect of general economic, business and financial conditions, and their effect on the New York City real estate market in particular;
dependence upon the New York City real estate market;
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.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
For quantitative and qualitative disclosure about market risk, see Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operation - Interest Rate Risk" in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 for the Company and the Operating Partnership and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk" in the Annual Report on Form 10-K for the year ended December 31, 2022 for the Company and the Operating Partnership. Our exposures to market risk have not changed materially since December 31, 2022.
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ITEM 4. CONTROLS AND PROCEDURES
SL GREEN REALTY CORP.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Company's internal control over financial reporting during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
SL GREEN OPERATING PARTNERSHIP, L.P.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the Operating Partnership's internal control over financial reporting during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of September 30, 2023, the Company and the Operating Partnership were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined could have a material adverse impact on us.
ITEM 1A. RISK FACTORS
As of September 30, 2023, there have been no material changes to the Risk Factors disclosed in "Part I. Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In August 2016, our Board of Directors approved a $1.0 billion share repurchase program under which we can buy shares of our common stock. The Board of Directors has since authorized five separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, fourth quarter of 2019, and fourth quarter of 2020 bringing the total program size to $3.5 billion.
As of September 30, 2023, share repurchases executed under the program, excluding the redemption of OP units, were as follows:
Period
Shares repurchased(1)
Average price paid per share
Cumulative number of shares repurchased as part of the repurchase plan or programs
Year ended 20208,276,032$64.3029,661,978
Year ended 20214,474,649$75.4434,136,627
Year ended 20221,971,092$76.6936,107,719
(1)There were no share repurchases during the nine months ended September 30, 2023.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.
Exhibit No.Description
Non-Renewal and Advisory Agreement, dated as of October 9, 2023, by and between SL Green Realty Corp. and Andrew Mathias, incorporated by reference to the Company's Form 8-K, dated October 9, 2023, filed with the SEC on October 10, 2023.
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.
101 The following financial statements from SL Green Realty Corp. and SL Green Operating Partnership L.P.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive (Loss) Income (unaudited), (iv) Consolidated Statements of Equity (unaudited), (v) Consolidated Statements of Capital (unaudited) (vi) Consolidated Statements of Cash Flows (unaudited), and (vii) Notes to Consolidated Financial Statements (unaudited), detail tagged and filed herewith.
104 Cover Page Interactive Data File (formatted as Inline XBRL in Exhibit 101)
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SL GREEN REALTY CORP.
  By: SL Green Realty Corp.
/s/ Matthew J. DiLiberto
Dated: November 3, 2023 By: 
Matthew J. DiLiberto
Chief Financial Officer
(Principal Financial and Accounting Officer)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  SL GREEN OPERATING PARTNERSHIP, L.P.
By:/s/ Matthew J. DiLiberto
Dated: November 3, 2023  Matthew J. DiLiberto
Chief Financial Officer of SL Green, the sole general partner of the Operating Partnership (Principal Financial and Accounting Officer)

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