Oct 22, 2026 earnings call — Leasing surge and big financing activity
Leased occupancy rose to 95% after leasing over 2 million square feet year-to-date, with rents up about 15% and pipeline at 1,300,000 square feet.
Revenue $0.2B (est $0.2B) · EPS $1.01 (est $-0.25)
Key quotes
"But I think given the complexion of our pipeline with the vast majority of our pipeline sort of 3/4 of it being renewals, the renewal concessions are dramatically lower than new tenant concessions."
"On the disposition plan, you've heard me talk about it throughout the year about 11 transactions. So far, we've announced 6 of those, the 2 most recent asset sales being Side Street buildings that got done at approximately [indiscernible] cap rates."
"I was especially proud to announce this week that we've sold a portion of our hospitality platform at a $200 million valuation, bringing $40 million in unbudgeted proceeds. This is part of our platform that most people don't -- doesn't value at all, and that we've monetized at a 20x FFO, while the whole of SL Green trades at just 9x FFO."
Analyst Q&A 14
leasing pipeline and mark-to-market
Q (Nicholas Yulico · Scotiabank): They asked how the leasing pipeline looks, how mark-to-market trends heading into next year, and whether any one-time comps boosted this year.
A: Management said the pipeline is over 1,300,000 square feet with about 840,000 square feet in active lease negotiations. They described mark-to-market as very healthy and suggested it's north of 20%. Harrison added the disposition program is underway with most deals progressing, though some may be patient on pricing discovery.
"And the mark-to-market, as we've experienced throughout all of this year is very, very healthy. I think something north of 20%." — Steven Durels
cap rates and new development
Q (Steve Sakwa · Evercore): They wanted to know how higher rents and higher rates interact to affect cap rates, and how management thinks about other new development opportunities like 346.
A: Management said cap rates depend on both interest rates and rent-driven profit growth; for prime Midtown assets they expect cap rates to stay in a fairly tight band around 5% to 6%. On development, they said 346 is in demolition and filings will start in December, and most new prime sites are underwriting to much higher projected rents, making projects feasible despite higher interest costs.
"I'd say most new development sites in prime locations today are modeling anywhere between $240 and $270 per square foot kind of midpoint average rental range taking on project completion." — Marc Holliday (CEO·CHAIR)
pricing expectations for different assets
Q (Peter Abramowitz · Deutsche Bank): They asked about concessions and whether pricing expectations differ between highly leased prime assets and less-leased properties.
A: Management said tenant improvement costs remain elevated but free rent is declining, and renewal concessions are much lower than for new tenants, improving net effective rents. On pricing, they noted a diverse buyer base and expect transaction activity across asset types, but some pricing discovery and slight delays due to interest rate volatility.
"I think the market today in a very strong way has a lot of capacity for a different buyer base, and I think we'll continue to see transaction activity." — Harrison Sitomer
timing of remaining asset sales
Q (Alexander Goldfarb · Piper Sandler): They wanted detail on how much of the $0.25 headwind is fee income versus interest, and when remaining disposition deals might close.
A: Management said about $0.05 of the $0.25 is fee income and the rest is interest expense, and they will give full guidance in December. On dispositions, two of four remaining deals include one near completion and one targeted by year-end but that could slip into early next year; other deals were just launched and will involve pricing discovery.
"2 of the 4 deals in the plan, one of which is fairly imminent, one of which we're hoping to get done by the end of the year could slip into early next year." — Harrison Sitomer
debt fund opportunities and Summit costs
Q (Blaine Heck · Wells Fargo): They asked where the opportunistic debt fund finds the best returns and whether Summit's wider operating loss was due to preopening or other spend.
A: Management said the fund is pursuing loan acquisitions, new originations, and extensions/upsizes of existing facilities, and that activity excels in volatile moments. For Summit, they explained third-quarter expenses are high because Summit pays percentage rent in the third quarter each year and they also have Paris build-out expense before it opens next year.
"And I would say where we're seeing the best opportunities today is a combination of loan acquisitions, new origination." — Harrison Sitomer
F&B business valuation and impact
Q (John Kim · BMO): They asked what the F&B business comprises, whether it was included in NAV other assets, and how much of the $0.20 interest headwind related to 245 Park financing and valuation.
A: Management said the F&B business is their hospitality and F&B operations across event and amenity spaces (excluding Summit or any real estate) and it was included in other assets at cost in NAV, producing a marked gain on sale. They said 245 Park had nominal impact on the $0.20 headwind, and they would not comment on valuation while in market.
"We're unable to comment on valuation, obviously, for competitive reasons as we're in the market." — Harrison Sitomer
OVA accounting income and Summit guidance
Q (Anthony Paolone · JPMorgan): They asked whether OVA accounting income changed and whether Summit's operating loss affected full-year guidance.
A: Management said OVA's $0.80 accounting income is unchanged from last quarter but distributions vary by quarter, so amounts differ between Q3 and Q4. They confirmed full-year guidance for Summit has come down versus initial expectations and they are mitigating revenue losses with cost containment.
"It has come down. Marc touched on how successful we've been certainly on a relative basis." — Matthew Diliberto (CFO)
drivers of dispositions next year
Q (Caitlin Burrows · Goldman Sachs): They asked how much of disposition activity is driven by debt cost and whether 2027 dispositions will look like 2026.
A: Management said dispositions fall into assets they choose to sell after extracting value and joint ventures used to optimize financing and grow fee income. They expect fewer outright sales and more joint ventures in 2027, noting retained assets are high quality with embedded mark-to-market growth.
"I think you'll see it a little bit more weighted towards joint ventures next year than outright sales." — Marc Holliday (CEO·CHAIR)
750 Third Avenue conversion timeline
Q (Jana Galan · BofA): They asked for an update on timeline and financing plan for the 750 Third Avenue redevelopment.
A: Management said the conversion to about 750 multifamily units is well advanced: interior demolition and column strengthening are done, permits were pulled to capture maximum tax benefits, and they expect construction financing to close around December with delivery targeted in 2029.
"I mean we're looking at, I think, a December close for that construction loan." — Harrison Sitomer
leasing progress in other portfolios and fee business growth
Q (U.S. Bancorp): They asked how much leasing progress to expect in Lexington, Third and Sixth Avenue portfolios and how much fee businesses tied to servicing can grow if rates stay elevated.
A: Management said leasing velocity is strong across those avenues with notable rent increases at specific buildings and strong tenant demand driven by tightening supply. On fee businesses, they noted the special servicing and asset management lines are active and growing, with diverse asset exposure making the servicing business long-lived and likely to grow into '27.
"We're now, as I've mentioned in previous calls, now the largest active SASB servicer in the country." — Harrison Sitomer
early renewals and 346 tenant demand
Q (Annabelle Ayer · Barclays): They asked when to sign early renewals versus waiting, and for details on tenant demand and next milestones for 346 Madison.
A: Management said they prefer locking in attractive economics now rather than gambling on better future returns; they aim to secure rent rolls and reduce concessions. For 346 Madison, they said construction completes in fourth quarter of 2031, but marketing is active and they are already in term sheet discussions with large prospective tenants.
"If the opportunity presents itself and the economics are attractive, you put the deal to bed." — Steven Durels
same-store NOI outlook and leasing CapEx
Q (Ronald Kamdem · Morgan Stanley): They asked whether the prior 10% same-store NOI target for 2027 still stands and about leasing CapEx trajectory.
A: Management reiterated the 10% same-store NOI objective for 2027 despite higher '26 performance and inflationary cost pressure, and said operations are containing expenses well. They expect leasing CapEx to trend lower over the next few years but tenant-controlled TI spend remains the biggest unpredictable component.
"That 10% is still our objective for '27 even in the face of 2 things, '26 performing better, which just sets the hurdle that much higher and inflationary pressures on operating expenses." — Matthew Diliberto (CFO)
buyer pool for Midtown assets
Q (Seth Bergey · Citi): They asked if the number or type of bidders for core Midtown office has changed and what levers exist to improve Summit performance.
A: Management said the buyer pool remains diverse (1031, institutional, domestic and international LPs) with strong capital inflows into New York office across debt and equity. For Summit, they cited weaker-than-expected tourism this year (including FIFA impacts) and said they're refocusing marketing toward domestic and local visitors to boost late-season and 2027 performance.
"Just within our own sale disposition execution to date, we've seen the 1031 buyer, the institutional buyer, the domestic LP." — Harrison Sitomer
F&B sale proceeds and near-term maturities
Q (Michael Lewis · Truist): They asked how much income the sold F&B business generated and whether certain upcoming mortgage maturities will be refinanced or sold.
A: Management said the F&B business generated about $2 million of full year FFO and it was sold at a 20x FFO multiple. On maturities and potential refinancings or dispositions, they declined to categorize specific assets publicly but said they are well advanced on the '27 financing plan and expect opportunistic financings and DPOs across the portfolio.
"Yes, that was -- it generated about $2 million of full year FFO." — Matthew Diliberto (CFO)