Hochul Tells Investors To Buy SL Green Amid Dimmer Outlook For 2026
Gov. Kathy Hochul made an appearance at SL Green Realty Trust's investor conference Friday to cheer on those financing New York City’s largest office landlord.
“To all of you, who are either major investors now or deciding to dip your toe in even further, what are you waiting for?” she said as the opening speaker of the call. “This is the smart money right here, right now.”
Speaking at One Vanderbilt, SL Green’s 73-story office tower, Hochul called the REIT’s CEO, Marc Holliday, a “visionary” who has “faith and a courageous attitude that is required during the tough times.”
The comments from the governor — who is running for reelection next year — came after SL Green provided earnings guidance to investors for 2026, financial projections that came below Wall Street expectations. Despite Hochul's compliments, SL Green’s stock plummeted roughly 8%, hitting its lowest point in over a year.
The forecast is especially salient for the industry as SL Green has been a flagbearer in New York City’s office market recovery.
The firm projected funds from operations per share to range from $4.40 to $4.70, below analysts’ estimate of $5.13, according to regulatory filings. It also expects net income per share to range from a loss of $0.27 to a gain of $0.03.
SL Green also announced it would return to paying dividends quarterly instead of monthly, a change that was made during the pandemic. Holliday attributed the reversal to SL Green’s board.
During the conference, executives said the company will be focused on paying down its debt load in 2026. To do so, the company plans to offload billions in assets and interests.
Potential sales include the office buildings at 185 Broadway and Landmark Square, as well as 315 W. 33rd St., a mixed-use property featuring luxury rental apartments. SL Green is also considering reducing its 50.1% stake in 245 Park Ave. by 25%, according to the company’s presentation.
“We're selling assets, losing [net operating income] to fight against interest rates that are too high,” SL Green Chief Financial Officer Matthew DiLiberto told investors. “That's frustrating. It costs us earnings.”
Still, executives tried to reassure investors with plans for the year ahead. Proceeds from sales are expected to fuel SL Green’s development pipeline, including an office building at 346 Madison Ave. and an office-to-residential conversion at 750 Third Ave., according to DiLiberto.
SL Green also will be pivoting to a plan B at 1515 Broadway, an office tower in the Times Square bowtie where Paramount Skydance's lease expires in 2031. Local officials voted against the developer’s proposal to transform the building into a casino in September.
“Undoubtedly, the biggest disappointment of the year, a true head-scratcher, [was] the abrupt and questionable end to our four-year pursuit of a casino license in Times Square,” DiLiberto said. “This outcome disappointed us as much as it disappointed the rest of New York and, ultimately, caused us to write off $12M of costs related to the process.”
Inspired by its casino plans, the REIT now plans to pursue an adaptive reuse project to convert floors 22 through 53 to 992 hotel rooms. The bottom floors would become an entertainment complex for concepts that do not require a casino license, and a Summit-branded observation deck would be added up top. Outside the building, SL Green wants to expand its digital signage to bring in additional revenue.
Executives remained cheery for the year ahead in the face of potential political challenges. Mayor-elect Zohran Mamdani, whose campaign promised rent freezes and corporate tax hikes, will take office next month.
“We are in this together,” Holliday said. “He needs the private sector, and we need him to achieve his goals and ours and to continue contributing to New York's upward trajectory.”
Being in with the governor, who has veto power over some of Mamdani's campaign promises, doesn’t hurt either. Holliday has previously championed the law Hochul supported last year that granted a long-term tax break to developers who convert office buildings into apartments.
During the event, SL Green Chief Investment Officer Harrison Sitomer called Hochul “a true partner to this industry,” adding that he has hosted the governor in his upstate home during the thoroughbred racing season.
“On a personal level, it's been a privilege to develop a close and collaborative relationship with the governor over the past several years,” Sitomer said. “Throughout that time, whether privately or publicly, she has consistently held the line against policies that would weaken the business environment or undermine the competitiveness of this great city.”
