UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
o 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.
(Exact name of registrant as specified in its charter)
Maryland |
|
13-3956775 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
420 Lexington Avenue, New York, New York 10170
(Address of principal executive offices) (Zip Code)
(212) 594-2700
(Registrants 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. YES x NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). YES x NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller Reporting Company ¨ |
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x
The number of shares outstanding of the registrants common stock, $0.01 par value, was 78,215,826 as of July 31, 2010.
SL GREEN REALTY CORP.
SL Green Realty Corp.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share data)
|
|
June 30, |
|
December 31, |
|
||
|
|
(Unaudited) |
|
|
|
||
Assets |
|
|
|
|
|
||
Commercial real estate properties, at cost: |
|
|
|
|
|
||
Land and land interests |
|
$ |
1,392,730 |
|
$ |
1,379,052 |
|
Building and improvements |
|
5,647,490 |
|
5,585,584 |
|
||
Building leasehold and improvements |
|
1,280,882 |
|
1,280,256 |
|
||
Property under capital lease |
|
12,208 |
|
12,208 |
|
||
|
|
8,333,310 |
|
8,257,100 |
|
||
Less: accumulated depreciation |
|
(832,436 |
) |
(738,422 |
) |
||
|
|
7,500,874 |
|
7,518,678 |
|
||
Assets held for sale |
|
|
|
992 |
|
||
Cash and cash equivalents |
|
339,577 |
|
343,715 |
|
||
Restricted cash |
|
157,515 |
|
94,495 |
|
||
Investment in marketable securities |
|
72,993 |
|
58,785 |
|
||
Tenant and other receivables, net of allowance of $13,893 and $14,271 in 2010 and 2009, respectively |
|
22,734 |
|
22,483 |
|
||
Related party receivables |
|
6,026 |
|
8,570 |
|
||
Deferred rents receivable, net of allowance of $24,603 and $24,347 in 2010 and 2009, respectively |
|
184,739 |
|
166,981 |
|
||
Structured finance investments, net of discount of $86,896 and $46,802 and allowance of $103,837 and $93,844 in 2010 and 2009, respectively |
|
867,393 |
|
784,620 |
|
||
Investments in unconsolidated joint ventures |
|
775,765 |
|
1,058,369 |
|
||
Deferred costs, net |
|
147,605 |
|
139,257 |
|
||
Other assets |
|
332,813 |
|
290,632 |
|
||
Total assets |
|
$ |
10,408,034 |
|
$ |
10,487,577 |
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
||
Mortgage notes and other loans payable |
|
$ |
2,800,866 |
|
$ |
2,595,552 |
|
Revolving credit facility |
|
800,000 |
|
1,374,076 |
|
||
Senior unsecured notes |
|
858,081 |
|
823,060 |
|
||
Accrued interest payable and other liabilities |
|
24,645 |
|
34,734 |
|
||
Accounts payable and accrued expenses |
|
144,168 |
|
125,982 |
|
||
Deferred revenue/gains |
|
325,228 |
|
349,669 |
|
||
Capitalized lease obligation |
|
16,979 |
|
16,883 |
|
||
Deferred land leases payable |
|
18,140 |
|
18,013 |
|
||
Dividend and distributions payable |
|
14,228 |
|
12,006 |
|
||
Security deposits |
|
39,617 |
|
39,855 |
|
||
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities |
|
100,000 |
|
100,000 |
|
||
Total liabilities |
|
5,141,952 |
|
5,489,830 |
|
||
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
||
Noncontrolling interests in operating partnership |
|
66,640 |
|
84,618 |
|
||
|
|
|
|
|
|
||
EquityU |
|
|
|
|
|
||
SL Green stockholders equity: |
|
|
|
|
|
||
Series C preferred stock, $0.01 par value, $25.00 liquidation preference, 11,700 and 6,300 issued and outstanding at June 30, 2010 and December 31, 2009, respectively |
|
274,000 |
|
151,981 |
|
||
Series D preferred stock, $0.01 par value, $25.00 liquidation preference, 4,000 issued and outstanding at June 30, 2010 and December 31, 2009, respectively |
|
96,321 |
|
96,321 |
|
||
Common stock, $0.01 par value 160,000 shares authorized and 81,570 and 80,875 issued and outstanding at June 30, 2010 and December 31, 2009, respectively (including 3,360 shares at both June 30, 2010 and December 31, 2009, held in Treasury, respectively) |
|
816 |
|
809 |
|
||
Additional paid-in-capital |
|
3,563,980 |
|
3,525,901 |
|
||
Treasury stock at cost |
|
(302,705 |
) |
(302,705 |
) |
||
Accumulated other comprehensive loss |
|
(30,305 |
) |
(33,538 |
) |
||
Retained earnings |
|
1,081,895 |
|
949,669 |
|
||
Total SL Green stockholders equity |
|
4,684,002 |
|
4,388,438 |
|
||
Noncontrolling interests in other partnerships |
|
515,440 |
|
524,691 |
|
||
Total equity |
|
5,199,442 |
|
4,913,129 |
|
||
Total liabilities and equity |
|
$ |
10,408,034 |
|
$ |
10,487,577 |
|
The accompanying notes are an integral part of these financial statements.
SL Green Realty Corp.
Condensed Consolidated Statements of Income
(Unaudited, and amounts in thousands, except per share data)
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
||||
Rental revenue, net |
|
$ |
199,719 |
|
$ |
191,917 |
|
$ |
398,306 |
|
$ |
387,547 |
|
Escalation and reimbursement |
|
29,961 |
|
31,390 |
|
61,429 |
|
65,019 |
|
||||
Preferred equity and investment income |
|
20,788 |
|
15,533 |
|
41,167 |
|
32,431 |
|
||||
Other income |
|
9,253 |
|
13,165 |
|
17,453 |
|
29,444 |
|
||||
Total revenues |
|
259,721 |
|
252,005 |
|
518,355 |
|
514,441 |
|
||||
Expenses |
|
|
|
|
|
|
|
|
|
||||
Operating expenses (including approximately $3,077 and $6,180 (2010) and $4,293 and $7,725 (2009) paid to affiliates) |
|
54,619 |
|
52,110 |
|
113,385 |
|
107,204 |
|
||||
Real estate taxes |
|
38,608 |
|
36,519 |
|
76,995 |
|
73,269 |
|
||||
Ground rent |
|
7,679 |
|
8,046 |
|
15,501 |
|
16,092 |
|
||||
Interest expense, net of interest income |
|
57,649 |
|
56,743 |
|
115,128 |
|
116,740 |
|
||||
Amortization of deferred financing costs |
|
1,792 |
|
1,476 |
|
4,308 |
|
2,912 |
|
||||
Depreciation and amortization |
|
56,905 |
|
54,888 |
|
113,957 |
|
109,352 |
|
||||
Loan loss and other investment reserves |
|
4,985 |
|
45,577 |
|
10,985 |
|
107,577 |
|
||||
Transaction related costs |
|
4,104 |
|
|
|
5,162 |
|
|
|
||||
Marketing, general and administrative |
|
18,379 |
|
17,946 |
|
36,778 |
|
35,868 |
|
||||
Total expenses |
|
244,720 |
|
273,305 |
|
492,199 |
|
569,014 |
|
||||
Income (loss) from continuing operations before equity in net income of unconsolidated joint ventures, noncontrolling interests, and discontinued operations |
|
15,001 |
|
(21,300 |
) |
26,156 |
|
(54,573 |
) |
||||
Equity in net income from unconsolidated joint ventures |
|
10,005 |
|
16,828 |
|
25,381 |
|
29,901 |
|
||||
Equity in net gain (loss) on sale of interest in unconsolidated joint ventures/ real estate |
|
126,769 |
|
(2,693 |
) |
126,769 |
|
6,848 |
|
||||
Gain (loss) on equity investment in marketable securities |
|
|
|
126 |
|
(285 |
) |
(681 |
) |
||||
Gain (loss) on early extinguishment of debt |
|
(1,276 |
) |
29,321 |
|
(1,389 |
) |
77,033 |
|
||||
Income from continuing operations |
|
150,499 |
|
22,282 |
|
176,632 |
|
58,528 |
|
||||
Net loss from discontinued operations |
|
|
|
(705 |
) |
|
|
(990 |
) |
||||
Gain on sale of discontinued operations |
|
|
|
|
|
|
|
6,572 |
|
||||
Net income |
|
150,499 |
|
21,577 |
|
176,632 |
|
64,110 |
|
||||
Net income attributable to noncontrolling interests in the operating partnership |
|
(2,467 |
) |
(382 |
) |
(2,758 |
) |
(1,702 |
) |
||||
Net income attributable to noncontrolling interests in other partnerships |
|
(3,449 |
) |
(3,683 |
) |
(7,097 |
) |
(7,160 |
) |
||||
Net income attributable to SL Green |
|
144,583 |
|
17,512 |
|
166,777 |
|
55,248 |
|
||||
Preferred stock dividends |
|
(7,545 |
) |
(4,969 |
) |
(14,660 |
) |
(9,938 |
) |
||||
Net income attributable to SL Green common stockholders |
|
$ |
137,038 |
|
$ |
12,543 |
|
$ |
152,117 |
|
$ |
45,310 |
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts attributable to SL Green common stockholders: |
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations |
|
$ |
12,385 |
|
$ |
15,827 |
|
$ |
27,605 |
|
$ |
33,330 |
|
Discontinued operations |
|
|
|
(681 |
) |
|
|
(954 |
) |
||||
Gain on sale of discontinued operations |
|
|
|
|
|
|
|
6,334 |
|
||||
Gain (loss) on sale of unconsolidated joint ventures/ real estate |
|
124,653 |
|
(2,603 |
) |
124,512 |
|
6,600 |
|
||||
Net income |
|
$ |
137,038 |
|
$ |
12,543 |
|
$ |
152,117 |
|
$ |
45,310 |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
||||
Net income from continuing operations before gain on sale and discontinued operations |
|
$ |
0.16 |
|
$ |
0.24 |
|
$ |
0.35 |
|
$ |
0.54 |
|
Net loss from discontinued operations, net of noncontrolling interest |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
||||
Gain on sale of discontinued operations, net of noncontrolling interest |
|
|
|
|
|
|
|
0.10 |
|
||||
Gain (loss) on sale of unconsolidated joint ventures/ real estate |
|
1.60 |
|
(0.04 |
) |
1.60 |
|
0.11 |
|
||||
Net income attributable to SL Green common stockholders |
|
$ |
1.76 |
|
$ |
0.19 |
|
$ |
1.95 |
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
||||
Net income from continuing operations before gain on sale and discontinued operations |
|
$ |
0.16 |
|
$ |
0.23 |
|
$ |
0.35 |
|
$ |
0.54 |
|
Net loss from discontinued operations |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
||||
Gain on sale of discontinued operations |
|
|
|
|
|
|
|
0.10 |
|
||||
Gain (loss) on sale of unconsolidated joint ventures/ real estate |
|
1.59 |
|
(0.04 |
) |
1.59 |
|
0.11 |
|
||||
Net income attributable to SL Green common stockholders |
|
$ |
1.75 |
|
$ |
0.18 |
|
$ |
1.94 |
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends per share |
|
$ |
0.10 |
|
$ |
0.10 |
|
$ |
0.20 |
|
$ |
0.475 |
|
Basic weighted average common shares outstanding |
|
78,046 |
|
67,363 |
|
77,936 |
|
62,298 |
|
||||
Diluted weighted average common shares and common share equivalents outstanding |
|
79,791 |
|
69,742 |
|
79,771 |
|
64,679 |
|
The accompanying notes are an integral part of these financial statements.
SL Green Realty Corp.
Condensed Consolidated Statement of Equity
(Unaudited, and amounts in thousands, except per share data)
|
|
SL Green Realty Corp. Stockholders |
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Series C |
|
Series D |
|
Common |
|
Additional |
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Preferred |
|
Preferred |
|
Shares |
|
Par |
|
Paid- |
|
Treasury |
|
Comprehensive |
|
Retained |
|
Noncontrolling |
|
Total |
|
Comprehensive |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2009 |
|
$ |
151,981 |
|
$ |
96,321 |
|
77,515 |
|
$ |
809 |
|
$ |
3,525,901 |
|
$ |
(302,705 |
) |
$ |
(33,538 |
) |
$ |
949,669 |
|
$ |
524,691 |
|
$ |
4,913,129 |
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,777 |
|
7,097 |
|
173,874 |
|
$ |
173,874 |
|
|||||||||
Net unrealized loss on derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,305 |
) |
|
|
|
|
(3,305 |
) |
(3,305 |
) |
||||||||||
SL Greens share of joint venture net unrealized loss on derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,346 |
) |
|
|
|
|
(2,346 |
) |
(2,346 |
) |
||||||||||
Unrealized gain on marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
8,884 |
|
|
|
|
|
8,884 |
|
8,884 |
|
||||||||||
Preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,660 |
) |
|
|
(14,660 |
) |
|
|
||||||||||
Redemption of units and DRIP proceeds |
|
|
|
|
|
464 |
|
5 |
|
23,336 |
|
|
|
|
|
|
|
|
|
23,341 |
|
|
|
||||||||||
Reallocation of noncontrolling interest in the operating partnership |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,940 |
) |
|
|
(3,940 |
) |
|
|
||||||||||
Deferred compensation plan & stock award, net |
|
|
|
|
|
139 |
|
1 |
|
401 |
|
|
|
|
|
|
|
|
|
402 |
|
|
|
||||||||||
Amortization of deferred compensation plan |
|
|
|
|
|
|
|
|
|
11,600 |
|
|
|
|
|
|
|
|
|
11,600 |
|
|
|
||||||||||
Deconsolidation of real estate investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,532 |
) |
(9,532 |
) |
|
|
||||||||||
Net proceeds from preferred stock offering |
|
122,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122,019 |
|
|
|
||||||||||
Proceeds from stock options exercised |
|
|
|
|
|
91 |
|
1 |
|
2,742 |
|
|
|
|
|
|
|
|
|
2,743 |
|
|
|
||||||||||
Cash distributions to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,816 |
) |
(6,816 |
) |
|
|
||||||||||
Cash distribution declared ($0.20 per common share of which none represented a return of capital for federal income tax purposes) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,951 |
) |
|
|
(15,951 |
) |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at June 30, 2010 |
|
$ |
274,000 |
|
$ |
96,321 |
|
78,209 |
|
$ |
816 |
|
$ |
3,563,980 |
|
$ |
(302,705 |
) |
$ |
(30,305 |
) |
$ |
1,081,895 |
|
$ |
515,440 |
|
$ |
5,199,442 |
|
$ |
177,107 |
|
The accompanying notes are an integral part of these financial statements.
SL Green Realty Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, and amounts in thousands, except per share data)
|
|
Six Months |
|
||||
|
|
Ended June 30, |
|
||||
|
|
2010 |
|
2009 |
|
||
Operating Activities |
|
|
|
|
|
||
Net income |
|
$ |
176,632 |
|
$ |
64,110 |
|
Adjustment to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
118,265 |
|
112,896 |
|
||
(Gain) loss on sale of discontinued operations |
|
|
|
(6,572 |
) |
||
Equity in net income from unconsolidated joint ventures |
|
(25,381 |
) |
(29,901 |
) |
||
Equity in net gain on sale of unconsolidated joint ventures |
|
(126,769 |
) |
(6,848 |
) |
||
Distributions of cumulative earnings from unconsolidated joint ventures |
|
15,965 |
|
18,384 |
|
||
Loan loss and other investment reserves |
|
10,985 |
|
107,577 |
|
||
Loss on equity investment in marketable securities |
|
285 |
|
681 |
|
||
(Gain) loss on early extinguishment of debt |
|
1,389 |
|
(77,033 |
) |
||
Deferred rents receivable |
|
(19,177 |
) |
(13,858 |
) |
||
Other non-cash adjustments |
|
(11,851 |
) |
3,127 |
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
||
Restricted cash operations |
|
(5,468 |
) |
24,814 |
|
||
Tenant and other receivables |
|
3,893 |
|
1,494 |
|
||
Related party receivables |
|
2,671 |
|
(1,843 |
) |
||
Deferred lease costs |
|
(13,775 |
) |
(9,768 |
) |
||
Other assets |
|
12,109 |
|
(13,704 |
) |
||
Accounts payable, accrued expenses and other liabilities |
|
16,705 |
|
(7,982 |
) |
||
Deferred revenue and land leases payable |
|
(3,824 |
) |
(13,200 |
) |
||
Net cash provided by operating activities |
|
152,654 |
|
152,374 |
|
||
Investing Activities |
|
|
|
|
|
||
Acquisitions of real estate property |
|
|
|
(8,340 |
) |
||
Additions to land, buildings and improvements |
|
(34,594 |
) |
(38,348 |
) |
||
Escrowed cash capital improvements/acquisition deposits |
|
(54,076 |
) |
(6,014 |
) |
||
Investments in unconsolidated joint ventures |
|
(81,903 |
) |
(12,677 |
) |
||
Distributions in excess of cumulative earnings from unconsolidated joint ventures |
|
10,339 |
|
13,334 |
|
||
Net proceeds from disposition of real estate/ partial interest in property |
|
504,172 |
|
26,007 |
|
||
Other investments |
|
(7,611 |
) |
(4,656 |
) |
||
Structured finance and other investments net of repayments/participations |
|
(89,428 |
) |
55,864 |
|
||
Net cash provided by investing activities |
|
246,899 |
|
25,170 |
|
||
Financing Activities |
|
|
|
|
|
||
Proceeds from mortgage notes and other loans payable |
|
104,100 |
|
1,301 |
|
||
Repayments of mortgage notes payable |
|
(20,925 |
) |
(22,574 |
) |
||
Proceeds from revolving credit facility and senior unsecured notes |
|
250,000 |
|
30,433 |
|
||
Repayments of revolving credit facility and senior unsecured notes |
|
(792,543 |
) |
(556,619 |
) |
||
Proceeds from stock options exercised and DRIP issuance |
|
13,989 |
|
|
|
||
Net proceeds from sale of preferred/common stock |
|
122,019 |
|
387,324 |
|
||
Distributions to noncontrolling interests in other partnerships |
|
(6,814 |
) |
(9,827 |
) |
||
Contributions from noncontrolling interests in other partnerships |
|
|
|
|
|
||
Redemption of noncontrolling interests in operating partnership |
|
(11,096 |
) |
|
|
||
Distributions to noncontrolling interests in operating partnership |
|
(262 |
) |
(1,752 |
) |
||
Dividends paid on common and preferred stock |
|
(28,223 |
) |
(52,822 |
) |
||
Deferred loan costs and capitalized lease obligation |
|
(33,936 |
) |
(3,129 |
) |
||
Net cash used in financing activities |
|
(403,691 |
) |
(227,665 |
) |
||
Net decrease in cash and cash equivalents |
|
(4,138 |
) |
(50,121 |
) |
||
Cash and cash equivalents at beginning of period |
|
343,715 |
|
726,889 |
|
||
Cash and cash equivalents at end of period |
|
$ |
339,577 |
|
$ |
676,768 |
|
The accompanying notes are an integral part of these financial statements.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
1. Organization and Basis of Presentation
SL Green Realty Corp., also referred to as the Company or SL Green, a Maryland corporation, and SL Green Operating Partnership, L.P., 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 the Service Corporation. All of the management, leasing and construction services with respect to the properties wholly-owned by us are conducted through SL Green Management LLC which is 100% owned by our 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 reduce or avoid 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 our operations are conducted through, the operating partnership. The Company is the sole managing general partner of the operating partnership. As of June 30, 2010, noncontrolling investors held, in the aggregate, a 1.5% limited partnership interest in the operating partnership. We refer to this as the noncontrolling interests in the operating partnership. See Note 13.
Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P., or ROP, are subsidiaries of our operating partnership.
As of June 30, 2010, we owned the following interests in commercial office properties in the New York Metro area, primarily in midtown Manhattan, a borough of New York City, or Manhattan. Our investments in the New York Metro area also include investments in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey, which are collectively known as the Suburban assets:
Location |
|
Ownership |
|
Number of |
|
Square Feet |
|
Weighted Average |
|
Manhattan |
|
Consolidated properties |
|
22 |
|
14,829,700 |
|
91.0 |
% |
|
|
Unconsolidated properties |
|
8 |
|
7,182,515 |
|
93.8 |
% |
|
|
|
|
|
|
|
|
|
|
Suburban |
|
Consolidated properties |
|
25 |
|
3,863,000 |
|
83.3 |
% |
|
|
Unconsolidated properties |
|
6 |
|
2,941,700 |
|
93.9 |
% |
|
|
|
|
61 |
|
28,816,915 |
|
91.0 |
% |
(1) The weighted average occupancy represents the total leased square feet divided by total available rentable square feet.
We also own investments in eight retail properties encompassing approximately 374,812 square feet, three development properties encompassing approximately 399,800 square feet and two land interests. In addition, we manage three office properties owned by third parties and affiliated companies encompassing approximately 1.0 million rentable square feet.
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 ownership interests of the respective partners. 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 avoid 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 our common stock on a one-for-one basis.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Basis of Quarterly Presentation
The accompanying unaudited condensed 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 fair presentation have been included. The 2010 operating results for the period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. These financial statements should be read in conjunction with the financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2009.
The balance sheet at December 31, 2009 has been derived from the audited financial statements at 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 or as structured finance investments. See Note 5 and Note 6. All significant intercompany balances and transactions have been eliminated.
In June 2009, the FASB amended the guidance for determining whether an entity is a variable interest entity, or VIE, and requires the performance of a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to direct the activities that most significantly impact the entitys 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. Adoption of this guidance on January 1, 2010 did not have a material impact on our consolidated financial statements.
A noncontrolling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Noncontrolling interests are required to be presented as a separate component of equity in the consolidated balance sheet and modifies the presentation of net income by requiring earnings and other comprehensive income to be attributed to controlling and noncontrolling interests.
We assess the accounting treatment for each joint venture and structured finance investment. This assessment includes a review of each joint venture or limited liability company agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entities economic performance. In situations where we or our partner approves, among other things, the annual budget, received a detailed monthly reporting package from us, meets on a quarterly basis to review the results of the joint venture, reviews and approves the joint ventures tax return before filing, and approves all leases that cover more than a nominal amount of space relative to the total rentable space at each property, we do not consolidate the joint venture as we consider these to be substantive participation rights that result in shared power of the activities that most significantly impact the performance of our joint venture. Our joint venture agreements also contain certain protective rights such as the requirement of partner approval to sell, finance or refinance the property and the payment of capital expenditures and operating expenditures outside of the approved budget or operating plan. We have no VIEs for which we are the primary beneficiary.
Investment in Commercial Real Estate Properties
On a periodic basis, we assess whether there are any indicators that the value of our real estate properties may be impaired or that its carrying value may not be recoverable. A propertys value is considered impaired if managements estimate of the aggregate future cash flows (undiscounted and without interest charges for consolidated properties and discounted for unconsolidated properties) to be generated by the property are less than the carrying value of the property. To the extent impairment has occurred and is considered to be other than temporary, the loss will be measured as the excess of the carrying amount of the property over the calculated fair value of the property. We do not believe that the value of any of our consolidated or unconsolidated rental properties was impaired at June 30, 2010 and December 31, 2009, respectively.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
We allocate the purchase price of real estate to land and building and, if determined to be material, intangibles, such as the value of above-, below- and at-market leases and origination costs associated with the in-place leases. We depreciate the amount allocated to building and other intangible assets over their estimated useful lives, which generally range from three to 40 years and from one to 14 years, respectively. The values of the above- and below-market leases are amortized and recorded as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental income over the remaining term of the associated lease, which generally range from one to 14 years. The value associated with in-place leases are amortized over the expected term of the associated lease, which generally range from one to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
We recognized an increase of approximately $6.2 million, $12.6 million, $5.1 million and $10.4 million in rental revenue for the three and six months ended June 30, 2010 and 2009, respectively, for the amortization of aggregate below-market leases in excess of above-market leases and a reduction in lease origination costs, resulting from the allocation of the purchase price of the applicable properties. We recognized a reduction in interest expense for the amortization of the above-market rate mortgages assumed of approximately $0.6 million, $0.9 million, $0.3 million and $2.1 million for the three and six months ended June 30, 2010 and 2009, respectively.
The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and intangible liabilities (acquired below-market leases) (amounts in thousands):
|
|
June 30, |
|
December 31, 2009 |
|
||
Identified intangible assets (included in other assets): |
|
|
|
|
|
||
Gross amount |
|
$ |
254,137 |
|
$ |
236,594 |
|
Accumulated amortization |
|
(114,488 |
) |
(98,090 |
) |
||
Net |
|
$ |
139,649 |
|
$ |
138,504 |
|
|
|
|
|
|
|
||
Identified intangible liabilities (included in deferred revenue): |
|
|
|
|
|
||
Gross amount |
|
$ |
487,750 |
|
$ |
480,770 |
|
Accumulated amortization |
|
(191,520 |
) |
(164,073 |
) |
||
Net |
|
$ |
296,230 |
|
$ |
316,697 |
|
Investment in Marketable Securities
We invest in marketable securities. At the time of purchase, we are required to designate a security as held-to-maturity, available-for-sale, or trading depending on ability and intent. We do not have any securities designated as held-to-maturity or trading at this time. Securities available-for-sale are reported at fair value pursuant to ASC 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive loss. Unrealized losses that are determined to be other-than-temporary are recognized in earnings. Included in accumulated other comprehensive loss at June 30, 2010 is approximately $4.8 million in net unrealized gains related to marketable securities.
At June 30, 2010, we held the following marketable securities (in thousands):
Level 1 Equity marketable securities |
$ |
8,310 |
|
Level 2 Bonds |
64,683 |
|
|
Total marketable securities available-for-sale |
$ |
72,993 |
|
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Fair Value Measurements
The methodologies used for valuing financial instruments have been categorized into three broad levels as follows:
Level 1 Quoted prices in active markets for identical instruments.
Level 2 Valuations based principally on other observable market parameters, including
· Quoted prices in active markets for similar instruments,
· Quoted prices in less active or inactive markets for identical or similar instruments,
· Other observable inputs (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates), and
· Market corroborated inputs (derived principally from or corroborated by observable market data).
Level 3 Valuations based significantly on unobservable inputs.
· Valuations based on third party indications (broker quotes or counterparty quotes) which were, in turn, based significantly on unobservable inputs or were otherwise not supportable as Level 2 valuations.
· Valuations based on internal models with significant unobservable inputs.
These levels form a hierarchy. We follow this hierarchy for our financial instruments measured at fair value on a recurring basis. The classifications are based on the lowest level of input that is significant to the fair value measurement.
Reserve for Possible Credit Losses
The expense for possible credit losses in connection with structured finance investments is the charge to earnings to increase the allowance for possible credit losses to the level that we estimate to be adequate, based on Level 3 data, considering delinquencies, loss experience and collateral quality. Other factors considered relate to geographic trends and product diversification, the size of the portfolio and current economic conditions. Based upon these factors, we establish the provision for possible credit losses by loan. When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired.
Where impairment is indicated, a valuation allowance is measured based upon the excess of the recorded investment amount over the net fair value of the collateral. Any deficiency between the carrying amount of an asset and the calculated value of the collateral is charged to expense. We recorded approximately $4.0 million, $10.0 million, $5.0 million and $5.0 million in loan loss reserves during the three and six months ended June 30, 2010 and 2009, respectively, on investments being held to maturity and $1.0 million, $1.0 million , $40.6 million and $102.6 million on investments held for sale during the three and six months ended June 30, 2010 and 2009, respectively.
Structured finance investments held for sale are carried at the lower of cost or fair market value using available market information obtained through consultation with dealers or other originators of such investments as well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management may conclude not to sell an investment designated as held for sale. In such situations, the loan will be reclassified at its net carrying value to structured finance investments held to maturity. For these reclassified loans, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the loan.
Income Taxes
We are taxed as a REIT under Section 856(c) of the Code. As a REIT, we generally are not subject to Federal income tax. To maintain our qualification as a REIT, we must distribute at least 90% of our REIT taxable income to our stockholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income tax on our taxable income at regular corporate rates. We may also be subject to certain state, local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on our undistributed taxable income.
Pursuant to amendments to the Code that became effective January 1, 2001, we have elected, and may in the future, elect to treat certain of our existing or newly created corporate subsidiaries as taxable REIT subsidiaries, or a TRS. In general, a TRS of ours may perform non-customary services for our tenants, hold assets that we cannot hold directly and generally may engage in any real estate or non-real estate related business. Our TRSs generate income, resulting in Federal income tax liability for these entities. Our TRSs recorded approximately $1.3 million and $2.1 million in Federal, state and local tax expense during the six months ended June 30, 2010 and 2009, respectively. We made estimated tax payments of $0.3 million and $0.4 million during the six months ended June 30, 2010 and 2009, respectively.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Stock-Based Employee Compensation Plans
We have a stock-based employee compensation plan, described more fully in Note 12.
The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because our plan has characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in our opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options.
Compensation cost for stock options, if any, is recognized ratably over the vesting period of the award. Our policy is to grant options with an exercise price equal to the quoted closing market price of our stock on the grant date. Awards of stock or restricted stock are expensed as compensation over the benefit period based on the fair value of the stock on the grant date.
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model based on historical information with the following weighted average assumptions for grants during the six months ended June 30, 2010 and 2009.
|
|
2010 |
|
2009 |
|
Dividend yield |
|
2.00 |
% |
5.79 |
% |
Expected life of option |
|
5.9 years |
|
5 years |
|
Risk-free interest rate |
|
2.84 |
% |
1.55 |
% |
Expected stock price volatility |
|
50.47 |
% |
55.07 |
% |
Earnings Per Share
We present both basic and diluted earnings per share, or EPS. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount. This also includes units of limited partnership interest.
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.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments, structured finance investments and accounts receivable. We place our cash investments in excess of insured amounts with high quality financial institutions. The collateral securing our structured finance investments is primarily located in the New York Metro area. (See Note 5). We perform ongoing credit evaluations of our tenants and require certain 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 tenants lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting the space. Although the properties in our real estate portfolio are primarily located in Manhattan, we also have properties located in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey. The tenants located in our buildings operate in various industries. Other than one tenant who accounts for approximately 8.3% of our annualized rent, no other tenant in our portfolio accounts for more than 6.2% of our annualized rent, including our share of joint venture annualized rent at June 30, 2010. Approximately 6%, 6%, 7% and 6% of our annualized rent, including our share of joint venture annualized rent, was attributable to 1515 Broadway, 420 Lexington Avenue, 1185 Avenue of the Americas and One Madison Avenue, respectively, for the quarter ended June 30, 2010. Two investments accounted for more than 10.0% of the revenue earned on structured finance investments during the three months ended June 30, 2010.
Reclassification
Certain prior year balances have been reclassified to conform with the current year presentation primarily in order to eliminate discontinued operations from income from continuing operations.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Accounting Standards Updates
In June 2009, the FASB issued guidance on accounting for transfers of financial assets. This guidance amends various components of the existing guidance governing sale accounting, including the recognition of assets obtained and liabilities assumed as a result of a transfer, and considerations of effective control by a transferor over transferred assets. In addition, this guidance removes the exemption for qualifying special purpose entities from the consolidation guidance. While the amended guidance governing sale accounting is applied on a prospective basis, the removal of the qualifying special purpose entity exception will require us to evaluate certain entities for consolidation. Adoption of this guidance on January 1, 2010 did not have a material impact on our consolidated financial statements.
In July 2010, the FASB issued updated guidance on disclosures about the credit quality of financing receivables and the allowance for credit losses which will require a greater level of information disclosed about the credit quality of loans and allowance for loan losses, as well as additional information related to credit quality indicators, past due information, and information related to loans modified in trouble debt restructuring. This guidance is effective for the fourth quarter of 2010 and it only amends existing disclosure requirements.
In March 2010, the FASB issued updated guidance on embedded credit derivatives for contracts containing an embedded credit derivative feature related to the transfer of credit risk that is not solely in the form of subordination. This guidance is effective for the third quarter of 2010, though early adoption is permitted. We do not expect the adoption of this guidance to have a material effect on our consolidated financial statements.
In January 2010, the FASB issued updated guidance on fair value measurements and disclosures, which requires disclosure of details of significant asset or liability transfers in and out of Level 1 and Level 2 measurements within the fair value hierarchy and inclusion of gross purchases, sales, issuances, and settlements in the rollforward of assets and liabilities valued using Level 3 inputs within the fair value hierarchy. The guidance also clarifies and expands existing disclosure requirements related to the disaggregation of fair value disclosures and inputs used in arriving at fair values for assets and liabilities using Level 2 and Level 3 inputs within the fair value hierarchy. These disclosure requirements were effective for interim and annual reporting periods beginning after December 15, 2009. The gross presentation of the Level 3 rollforward is required for interim and annual reporting periods beginning after December 15, 2010.
3. Property Acquisitions
In January 2010, we became the sole owner of 100 Church Street, a 1.05 million square-foot office tower located in downtown Manhattan, following the successful foreclosure of the senior mezzanine loan at the property. Our initial investment totaled $40.9 million which was comprised of a 50% interest in the senior mezzanine loan and two other mezzanine loans at 100 Church Street, which we acquired from Gramercy in the summer of 2007. At closing of the foreclosure, we funded an additional $15.0 million of capital into the project as part of our agreement with Wachovia Bank, N.A. to extend and restructure the existing financing. The restructured $139.7 million mortgage carries an interest rate of 350 basis points over the 30-day LIBOR. The mortgage matures in January 2013 and has a one-year extension option. Gramercy declined to fund its share of this capital and instead entered into a transaction whereby it transferred its interests in the investment to us at closing, subject to certain future contingent payments to Gramercy.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
The following summarizes our allocation of the purchase price of the assets acquired and liabilities assumed upon the completion of the foreclosure of 100 Church Street (in thousands):
Land |
|
$ |
32,494 |
|
Building |
|
86,806 |
|
|
Acquired above-market leases |
|
118 |
|
|
Acquired in-place leases |
|
17,380 |
|
|
Restricted cash |
|
53,735 |
|
|
Assets acquired |
|
190,533 |
|
|
|
|
|
|
|
Mortgage note payable |
|
139,672 |
|
|
Acquired below-market leases |
|
8,025 |
|
|
Other liabilities, net of other assets |
|
1,674 |
|
|
Liabilities assumed |
|
149,371 |
|
|
Net assets |
|
$ |
41,162 |
|
4. Property Dispositions and Assets Held for Sale
At June 30, 2009, discontinued operations included the results of operations of real estate assets sold prior to that date. This included 55 Corporate Drive, NJ which was sold in January 2009, the membership interests in GKK Manager LLC which were sold in April 2009 (See Note 6) and 399 Knollwood Road, Westchester, which was sold in August 2009.
The following table summarizes income from discontinued operations and the related realized gain on sale of discontinued operations for the three and six months ended June 30, 2009 (in thousands). No assets were considered as held for sale during the six months ended June 30, 2010.
|
|
Three Months |
|
Six Months |
|
||
|
|
June 30, |
|
June 30, |
|
||
|
|
2009 |
|
2009 |
|
||
Revenues |
|
|
|
|
|
||
Rental revenue |
|
$ |
818 |
|
$ |
2,240 |
|
Escalation and reimbursement revenues |
|
147 |
|
269 |
|
||
Other income |
|
1,632 |
|
6,517 |
|
||
Total revenues |
|
2,597 |
|
9,026 |
|
||
Operating expense |
|
378 |
|
789 |
|
||
Real estate taxes |
|
232 |
|
430 |
|
||
Interest expense, net of interest income |
|
270 |
|
867 |
|
||
Marketing, general and administrative |
|
2,124 |
|
7,299 |
|
||
Depreciation and amortization |
|
298 |
|
631 |
|
||
Total expenses |
|
3,302 |
|
10,016 |
|
||
Loss from discontinued operations |
|
(705 |
) |
(990 |
) |
||
Gain on sale of discontinued operations |
|
|
|
6,572 |
|
||
Income (loss) from discontinued operations |
|
$ |
(705 |
) |
$ |
5,582 |
|
5. Structured Finance Investments
During the six months ended June 30, 2010 and 2009, our structured finance and preferred equity investments (net of discounts), including investments classified as held-for-sale, increased approximately $181.2 million and $36.5 million, respectively, due to originations, purchases, accretion of discounts and paid-in-kind interest. There were approximately $99.4 million and $176.1 million in repayments, participations, sales, foreclosures and loan loss reserves recorded during those periods, respectively, which offset the increases in structured finance investments.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
As of June 30, 2010 and December 31, 2009, we held the following structured finance investments, excluding preferred equity investments, with an aggregate weighted average current yield of approximately 7.9% (in thousands):
Loan |
|
Gross |
|
Senior |
|
2010 |
|
2009 |
|
Initial |
|
||||
Other Loan(1) |
|
$ |
3,500 |
|
$ |
15,000 |
|
$ |
3,500 |
|
$ |
3,500 |
|
September 2021 |
|
Mezzanine Loan(1) |
|
60,000 |
|
205,000 |
|
58,646 |
|
58,760 |
|
February 2016 |
|
||||
Mortgage/ Mezzanine Loan(1) |
|
50,000 |
|
174,840 |
|
46,363 |
|
25,000 |
|
May 2016 |
|
||||
Mezzanine Loan(1) |
|
35,000 |
|
165,000 |
|
39,628 |
|
39,125 |
|
October 2016 |
|
||||
Mezzanine Loan(1)(3)(9)(10)(11) |
|
75,000 |
|
4,264,940 |
|
70,092 |
|
70,092 |
|
December 2016 |
|
||||
Other Loan(1)(5)(9)(11) |
|
5,000 |
|
|
|
5,350 |
|
5,350 |
|
May 2011 |
|
||||
Whole Loan(2)(3) (9) |
|
9,815 |
|
|
|
9,275 |
|
9,636 |
|
December 2010 |
|
||||
Mezzanine Loan(1)(2)(4)(9)(11) |
|
25,000 |
|
312,676 |
|
27,422 |
|
26,605 |
|
January 2013 |
|
||||
Mezzanine Loan(1) |
|
16,000 |
|
90,000 |
|
15,697 |
|
15,697 |
|
August 2017 |
|
||||
Mezzanine Loan(3)(13) |
|
|
|
|
|
|
|
40,938 |
|
|
|
||||
Other Loan(1) |
|
1,000 |
|
|
|
1,000 |
|
1,000 |
|
December 2010 |
|
||||
Junior Participation(1)(6)(9)(11) |
|
14,189 |
|
|
|
9,938 |
|
9,938 |
|
April 2008 |
|
||||
Mezzanine Loan(1)(11) (12) |
|
67,000 |
|
1,139,000 |
|
84,636 |
|
84,636 |
|
March 2017 |
|
||||
Mezzanine Loan(14) |
|
23,145 |
|
|
|
|
|
35,908 |
|
July 2010 |
|
||||
Mezzanine Loan(3)(9)(11) |
|
22,644 |
|
7,099,849 |
|
|
|
|
|
|
|
||||
Junior Participation(1)(9) |
|
11,000 |
|
53,000 |
|
11,000 |
|
11,000 |
|
November 2011 |
|
||||
Junior Participation(7)(9) |
|
12,000 |
|
61,250 |
|
10,875 |
|
10,875 |
|
June 2012 |
|
||||
Junior Participation(9)(11) |
|
9,948 |
|
48,198 |
|
5,866 |
|
5,866 |
|
December 2010 |
|
||||
Junior Participation(8)(9) |
|
50,000 |
|
2,214,727 |
|
47,540 |
|
47,691 |
|
April 2011 |
|
||||
Mortgage/ Mezzanine Loan(2)(16) |
|
146,164 |
|
285,000 |
|
137,223 |
|
104,431 |
|
July 2012 |
|
||||
Whole Loan(1)(3) |
|
9,375 |
|
|
|
9,913 |
|
9,902 |
|
February 2015 |
|
||||
Junior Participation |
|
35,041 |
|
210,000 |
|
39,834 |
|
30,548 |
|
January 2012 |
|
||||
Mortgage/mezzanine loan(15) |
|
185,160 |
|
|
|
191,406 |
|
167,717 |
|
September 2010 |
|
||||
Whole loan(1) |
|
10,859 |
|
|
|
10,956 |
|
|
|
November 2013 |
|
||||
Junior Participation |
|
8,058 |
|
70,800 |
|
8,565 |
|
|
|
October 2010 |
|
||||
Mezzanine Loan(1) |
|
60,000 |
|
755,000 |
|
60,000 |
|
|
|
June 2016 |
|
||||
Loan loss reserve(9) |
|
|
|
|
|
(106,851 |
) |
(101,866 |
) |
|
|
||||
|
|
$ |
944,898 |
|
$ |
17,164,280 |
|
$ |
797,874 |
|
$ |
712,349 |
|
|
|
(1) |
|
This is a fixed rate loan. |
(2) |
|
The difference between the pay and accrual rates is included as an addition to the principal balance outstanding. |
(3) |
|
Gramercy holds a pari passu interest in this asset. |
(4) |
|
This loan had been in default since December 2007. We reached an agreement with the borrower to, amongst other things, extend the maturity date to January 2013. |
(5) |
|
The original loan which was scheduled to mature in February 2010 was replaced with two loans which mature in May 2011. The total principal balance remained unchanged. Approximately $10.4 million was redeemed in October 2008. |
(6) |
|
This loan is in default. The lender has begun foreclosure proceedings. Another participant holds a $12.2 million pari-pasu interest in this loan. |
(7) |
|
This loan was extended for two years to June 2012. |
(8) |
|
Gramercy is the borrower under this loan. This loan consists of mortgage and mezzanine financing. |
(9) |
|
This represents specifically allocated loan loss reserves. Our reserves reflect managements judgment of the probability and severity of losses based on Level 3 data. We cannot be certain that our judgment will prove to be correct and that reserves will be adequate over time to protect against potential future losses. This includes a $1.0 million and $69.1 million mark-to-market adjustment against our held for sale investment during the three months ended June 30, 2010 and the year ended December 31, 2009, respectively. |
(10) |
|
This investment was classified as held for sale at June 30, 2010 and December 31, 2009. |
(11) |
|
This loan is on non-accrual status. |
(12) |
|
Interest is added to the principal balance for this accrual only loan. |
(13) |
|
This loan was in default as it was not repaid upon maturity. We were designated as special servicer for this loan and took over management and leasing of the property under a forbearance agreement in August 2009. We foreclosed on this property in January 2010. |
(14) |
|
We acquired Gramercys interest in this investment in July 2009 for approximately $16.0 million. |
(15) |
|
The outstanding principal balance on the first mortgage was $177.4 million at June 30, 2010. We have a commitment to fund up to an additional $70.1 million as of June 30, 2010. |
(16) |
|
Gramercy holds a pari passu interest in the mezzanine loan. |
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Preferred Equity Investments
As of June 30, 2010 and December 31, 2009, we held the following preferred equity investments, with an aggregate weighted average current yield of approximately 9.1% (in thousands):
Type |
|
Gross |
|
Senior |
|
2010 |
|
2009 |
|
Initial |
|
||||
Preferred equity(1)(3)(5) |
|
$ |
15,000 |
|
$ |
2,350,000 |
|
$ |
15,000 |
|
$ |
15,000 |
|
February 2015 |
|
Preferred equity(1)(2)(6)(7) |
|
51,000 |
|
208,181 |
|
44,047 |
|
41,791 |
|
February 2014 |
|
||||
Preferred equity(3)(5) |
|
34,120 |
|
88,000 |
|
31,178 |
|
31,178 |
|
March 2010 |
|
||||
Preferred equity(3)(4) |
|
44,733 |
|
984,708 |
|
46,372 |
|
46,372 |
|
August 2012 |
|
||||
Loan loss reserve(3) |
|
|
|
|
|
(67,078 |
) |
(61,078 |
) |
|
|
||||
|
|
$ |
144,853 |
|
$ |
3,630,889 |
|
$ |
69,519 |
|
$ |
73,263 |
|
|
|
(1) |
|
This is a fixed rate investment. |
(2) |
|
Gramercy holds a mezzanine loan on the underlying asset. |
(3) |
|
This represents specifically allocated loan loss reserves. Our reserves reflect managements judgment of the probability and severity of losses based on Level 3 data. We cannot be certain that our judgment will prove to be correct and that reserves will be adequate over time to protect against potential future losses. |
(4) |
|
This loan was converted from a mezzanine loan to preferred equity in July 2009. |
(5) |
|
This investment is on non-accrual status. |
(6) |
|
The difference between the pay and accrual rates is included as an addition to the principal balance outstanding. |
(7) |
|
This investment was classified as held for sale at June 30, 2009, but as held-to-maturity at December 31, 2009. The reserve previously taken against this loan is being accreted up to the face amount through the maturity date. |
The following table is a rollforward of our total loan loss reserves at June 30, 2010 and December 31, 2009 (in thousands):
|
|
2010 |
|
2009 |
|
||
Balance at beginning of year |
|
$ |
93,844 |
|
$ |
98,916 |
|
Expensed |
|
10,985 |
|
145,855 |
|
||
Charge-offs |
|
(992 |
) |
(150,927 |
) |
||
Balance at end of period |
|
$ |
103,837 |
|
$ |
93,844 |
|
At June 30, 2010 and December 31, 2009, all structured finance investments, other than as noted above, were performing in accordance with the terms of the loan agreements.
6. Investment in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners, including The City Investment Fund, or CIF, SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, or SITQ, Canada Pension Plan Investment Board, or CPPIB, a fund managed by JP Morgan Investment Management, or JP Morgan, Prudential Real Estate Investors, or Prudential, Onyx Equities, or Onyx, The Witkoff Group, or Witkoff, Credit Suisse Securities (USA) LLC, or Credit Suisse, Jeff Sutton, or Sutton, and Gramercy Capital Corp. (NYSE: GKK), or Gramercy, as well as private investors. As we do not control these joint ventures, we account for them under the equity method of accounting.
In May 2010, Green Hill Acquisition LLC, a wholly owned subsidiary of ours, sold its 45% beneficial interest in the property known as 1221 Avenue of the Americas, located in Manhattan to a wholly owned subsidiary of CPPIB, for total consideration of $577.4 million, of which approximately $95.9 million represents payment for existing reserves and the assumption of our pro-rata share of in-place financing. The sale generated proceeds to us of approximately $500.9 million. We recognized a gain of approximately $126.8 million on the sale of our interest.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
The table below provides general information on each joint venture as of June 30, 2010 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property |
|
Partner |
|
Ownership |
|
Economic |
|
Square |
|
Acquired |
|
Acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1515 Broadway(2) |
|
SITQ |
|
55.00 |
% |
68.45 |
% |
1,750 |
|
05/02 |
|
$ |
483,500 |
|
100 Park Avenue |
|
Prudential |
|
49.90 |
% |
49.90 |
% |
834 |
|
02/00 |
|
$ |
95,800 |
|
379 West Broadway |
|
Sutton |
|
45.00 |
% |
45.00 |
% |
62 |
|
12/05 |
|
$ |
19,750 |
|
21 West 34th Street |
|
Sutton |
|
50.00 |
% |
50.00 |
% |
30 |
|
07/05 |
|
$ |
22,400 |
|
800 Third Avenue(3) |
|
Private Investors |
|
42.95 |
% |
42.95 |
% |
526 |
|
12/06 |
|
$ |
285,000 |
|
521 Fifth Avenue |
|
CIF |
|
50.10 |
% |
50.10 |
% |
460 |
|
12/06 |
|
$ |
240,000 |
|
One Court Square |
|
JP Morgan |
|
30.00 |
% |
30.00 |
% |
1,402 |
|
01/07 |
|
$ |
533,500 |
|
1604-1610 Broadway |
|
Onyx/Sutton |
|
45.00 |
% |
63.00 |
% |
30 |
|
11/05 |
|
$ |
4,400 |
|
1745 Broadway(4) |
|
Witkoff/SITQ/Lehman Bros. |
|
32.26 |
% |
32.26 |
% |
674 |
|
04/07 |
|
$ |
520,000 |
|
1 and 2 Jericho Plaza |
|
Onyx/Credit Suisse |
|
20.26 |
% |
20.26 |
% |
640 |
|
04/07 |
|
$ |
210,000 |
|
2 Herald Square(5) |
|
Gramercy |
|
55.00 |
% |
55.00 |
% |
354 |
|
04/07 |
|
$ |
225,000 |
|
885 Third Avenue(6) |
|
Gramercy |
|
55.00 |
% |
55.00 |
% |
607 |
|
07/07 |
|
$ |
317,000 |
|
16 Court Street |
|
CIF |
|
35.00 |
% |
35.00 |
% |
318 |
|
07/07 |
|
$ |
107,500 |
|
The Meadows(7) |
|
Onyx |
|
50.00 |
% |
50.00 |
% |
582 |
|
09/07 |
|
$ |
111,500 |
|
388 and 390 Greenwich Street(8) |
|
SITQ |
|
50.60 |
% |
50.60 |
% |
2,600 |
|
12/07 |
|
$ |
1,575,000 |
|
27-29 West 34th Street |
|
Sutton |
|
50.00 |
% |
50.00 |
% |
41 |
|
01/06 |
|
$ |
30,000 |
|
1551-1555 Broadway |
|
Sutton |
|
10.00 |
% |
10.00 |
% |
26 |
|
07/05 |
|
$ |
80,100 |
|
717 Fifth Avenue |
|
Sutton/Nakash |
|
32.75 |
% |
32.75 |
% |
120 |
|
09/06 |
|
$ |
251,900 |
|
141 Fifth Avenue |
|
Sutton/Rapport |
|
45.00 |
% |
45.00 |
% |
22 |
|
09/05 |
|
$ |
13,250 |
|
180/182 Broadway and 63 Nassau Blvd |
|
Sutton |
|
50.00 |
% |
50.00 |
% |
71 |
|
02/08 |
|
$ |
43,600 |
|
600 Lexington Avenue |
|
CPPIB |
|
55.00 |
% |
55.00 |
% |
304 |
|
05/10 |
|
$ |
193,000 |
|
(1) |
|
Acquisition price represents the actual or implied purchase price for the joint venture. |
(2) |
|
Under a tax protection agreement established to protect the limited partners of the partnership that transferred 1515 Broadway to the joint venture, the joint venture has agreed not to adversely affect the limited partners tax positions before December 2011. One tenant, whose leases primarily end in 2015, represents approximately 88.2% of this joint ventures annualized rent at June 30, 2010. |
(3) |
|
We invested approximately $109.5 million in this asset through the origination of a loan secured by up to 47% of the interests in the propertys ownership, with an option to convert the loan to an equity interest. Certain existing members have the right to re-acquire approximately 4% of the propertys equity. These interests were re-acquired in December 2008 and reduced our interest to 42.95% |
(4) |
|
We have the ability to syndicate our interest down to 14.79%. |
(5) |
|
We, along with Gramercy, together as tenants-in-common, acquired a fee interest in 2 Herald Square. The fee interest is subject to a long-term operating lease. |
(6) |
|
We, along with Gramercy, together as tenants-in-common, acquired a fee and leasehold interest in 885 Third Avenue. The fee and leasehold interests are subject to a long-term operating lease. |
(7) |
|
We, along with Onyx, acquired the remaining 50% interest on a pro-rata basis in September 2009. |
(8) |
|
The property is subject to a 13-year triple-net lease arrangement with a single tenant. |
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
We finance our joint ventures with non-recourse debt. The first mortgage notes payable collateralized by the respective joint venture properties and assignment of leases at June 30, 2010 and December 31, 2009, respectively, are as follows (in thousands):
Property |
|
Maturity |
|
Interest |
|
2010 |
|
2009 |
|
||
|
|
|
|
|
|
|
|
|
|
||
1515 Broadway(2) |
|
12/2014 |
|
3.46 |
% |
$ |
469,001 |
|
$ |
475,000 |
|
100 Park Avenue(3) |
|
09/2014 |
|
6.64 |
% |
$ |
200,000 |
|
$ |
200,000 |
|
379 West Broadway |
|
07/2011 |
|
1.94 |
% |
$ |
20,991 |
|
$ |
20,991 |
|
21 West 34th Street |
|
12/2016 |
|
5.76 |
% |
$ |
100,000 |
|
$ |
100,000 |
|
800 Third Avenue |
|
08/2017 |
|
6.00 |
% |
$ |
20,910 |
|
$ |
20,910 |
|
521 Fifth Avenue |
|
04/2011 |
|
1.29 |
% |
$ |
140,000 |
|
$ |
140,000 |
|
One Court Square |
|
09/2015 |
|
4.91 |
% |
$ |
315,000 |
|
$ |
315,000 |
|
2 Herald Square |
|
04/2017 |
|
5.36 |
% |
$ |
191,250 |
|
$ |
191,250 |
|
1604-1610 Broadway(4) |
|
04/2012 |
|
5.66 |
% |
$ |
27,000 |
|
$ |
27,000 |
|
1745 Broadway |
|
01/2017 |
|
5.68 |
% |
$ |
340,000 |
|
$ |
340,000 |
|
1 and 2 Jericho Plaza |
|
05/2017 |
|
5.65 |
% |
$ |
163,750 |
|
$ |
163,750 |
|
885 Third Avenue |
|
07/2017 |
|
6.26 |
% |
$ |
267,650 |
|
$ |
267,650 |
|
The Meadows |
|
09/2012 |
|
1.64 |
% |
$ |
87,034 |
|
$ |
85,478 |
|
388 and 390 Greenwich Street(5) |
|
12/2017 |
|
5.09 |
% |
$ |
1,138,379 |
|
$ |
1,138,379 |
|
16 Court Street |
|
10/2013 |
|
2.79 |
% |
$ |
87,208 |
|
$ |
88,573 |
|
27-29 West 34th Street |
|
05/2011 |
|
1.94 |
% |
$ |
54,600 |
|
$ |
54,800 |
|
1551-1555 Broadway(6) |
|
10/2011 |
|
4.30 |
% |
$ |
131,100 |
|
$ |
133,600 |
|
717 Fifth Avenue(7) |
|
09/2011 |
|
5.25 |
% |
$ |
245,000 |
|
$ |
245,000 |
|
141 Fifth Avenue |
|
06/2017 |
|
5.70 |
% |
$ |
25,000 |
|
$ |
25,000 |
|
180/182 Broadway and 63 Nassau Street(8) |
|
02/2011 |
|
2.54 |
% |
$ |
22,634 |
|
$ |
22,534 |
|
600 Lexington Avenue |
|
03/2014 |
|
5.74 |
% |
$ |
49,850 |
|
$ |
|
|
(1) |
Interest rate represents the effective all-in weighted average interest rate for the quarter ended June 30, 2010. |
(2) |
In December 2009 the $625.0 million mortgage was repaid and replaced with a $475.0 million mortgage. In connection with the refinancing, the partners made an aggregate $163.9 million capital contribution to the joint venture. |
(3) |
This loan was refinanced in September 2009, and replaced a $175.0 million construction loan which was scheduled to mature in November 2015 and which carried a fixed interest rate of 6.52%. The new loan has a committed amount of $215.0 million. |
(4) |
This loan went into default in November 2009 due to the non-payment of debt service. The joint venture is in discussions with the special servicer to resolve this default. |
(5) |
Comprised of a $576.0 million mortgage and a $562.4 million mezzanine loan, both of which are fixed rate loans, except for $16.0 million of the mortgage and $15.6 million of the mezzanine loan which are floating. Up to $200.0 million of the mezzanine loan, secured indirectly by these properties, is recourse to us. We believe it is unlikely that we will be required to perform under this guarantee. |
(6) |
This construction loan had a committed amount of $138.6 million. This loan was fully funded in September 2009 at the reduced committed amount of $133.6 million. |
(7) |
This loan has a committed amount of $285.0 million. |
(8) |
This loan has a committed amount of $31.0 million. |
We act as the operating partner and day-to-day manager for all our joint ventures, except for 800 Third Avenue, 1 and 2 Jericho Plaza and The Meadows. We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to our joint ventures. We earned approximately $6.6 million, $9.1 million, $3.3 million and $21.4 million from these services for the three and six months ended June 30, 2010, and 2009, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
Gramercy Capital Corp.
In April 2004, we formed Gramercy as a commercial real estate finance business. Gramercy qualified as a REIT for federal income tax purposes and expects to qualify for its current fiscal year.
At June 30, 2010, we held 6,219,370 shares, or approximately 12.47% of Gramercys common stock. Our total investment of approximately $7.8 million is based on the market value of our common stock investment in Gramercy at June 30, 2010. As we no longer have any significant influence over Gramercy, we account for our investment as available-for-sale securities.
Prior to Gramercys internalization of GKK Manager LLC, or the Manager (our former wholly-owned subsidiary which was the external manger to Gramercy), which we refer to as the GKK Internalization, we were entitled to an incentive return payable through the Class B limited partner interests in Gramercys operating partnership, equal to 25% of the amount by which funds from operations (as defined in Gramercys amended and restated partnership agreement) plus certain accounting gains exceed the product of the weighted average stockholders equity of Gramercy multiplied by 9.5% (divided by four to adjust for quarterly calculations). This arrangement was terminated when the GKK Internalization was completed in April 2009. Amounts payable to the Class B limited partnership interests were waived since July 1, 2008.
In connection with Gramercys initial public offering, the Manager entered into a management agreement with Gramercy, which provided for an initial term through December 2007, and which was subsequently extended through December 2009. The management agreement was further amended in September 2007 and amended and restated in October 2008 and was subsequently terminated on April 24, 2009 in connection with the GKK Internalization. In addition, Gramercy also paid the Manager a collateral management fee. For the three and six months ended June 30, 2009, we received an aggregate of approximately $1.6 million and $6.5 million, respectively, and no such fees in 2010 under the management agreement, and we received nothing under the collateral management agreement in either period. Fees payable to the Manager under the collateral management agreement were remitted to Gramercy for all periods subsequent to June 30, 2008. In 2008, we, as well as Gramercy, each formed special committees comprised solely of independent directors to consider whether the GKK Internalization and/or amendment to the management agreement would be in the best interest of each company and its respective shareholders. The GKK Internalization was completed on April 24, 2009 through the direct acquisition by Gramercy of the Manager.
On October 27, 2008, the Manager entered into a Second Amended and Restated Management Agreement (the Second Amended Management Agreement) with Gramercy and GKK Capital LP. The Second Amended Management Agreement generally contained the same terms and conditions as the Amended and Restated Management Agreement, dated as of April 19, 2006, but provided that all management, service and similar fees relating to Gramercys CDOs that the Manager was entitled to receive were to be remitted by the Manager to Gramercy for any period subsequent to July 1, 2008. The Second Amended Management Agreement was terminated in connection with the GKK Internalization.
In May 2005, our Compensation Committee approved long-term incentive performance awards pursuant to which certain of our officers and employees, including some of whom are our senior executive officers, were awarded a portion of the interests previously held by us in the Manager, which at the time was an affiliate of ours, as well as in the Class B limited partner interests in Gramercys operating partnership. The vesting of these awards was dependent upon, among other things, tenure of employment and the performance of our investment in Gramercy. These awards vested in May 2008. On April 24, 2009, Gramercy acquired all the interests in the Manager and all the Class B limited partner interests from us for no consideration.
Prior to the GKK Internalization, Gramercy was obligated to reimburse the Manager for its costs incurred under an asset servicing agreement and an outsourcing agreement between the Manager and us. The outsourcing agreement provided for a fee of $2.7 million per year, increasing 3% annually over the prior year. For the three and six months ended June 30, 2009, the Manager received an aggregate of approximately $0.2 million and $1.0 million, respectively, under the outsourcing and asset servicing agreements.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
On October 27, 2008, we, Gramercy and GKK Capital LP entered into a services agreement (the Services Agreement) pursuant to which we provided consulting and other services to Gramercy. We made certain members of management available in connection with the provision of the services until the completion of the GKK Internalization on April 24, 2009. In consideration for the consulting services, we received from Gramercy a fee of $200,000 per month. We also provided Gramercy with certain other services described in the Services Agreement for a fee of $100,000 per month in cash until April 24, 2009. The Services Agreement was terminated in connection with the GKK Internalization. Since October 27, 2008, an affiliate of ours has served as special servicer for certain assets held by Gramercy or its affiliates and assigned its duties to a subsidiary of ours.
All fees earned from Gramercy are included in Other Income in the Consolidated Statements of Income.
Effective May 2005, June 2009 and October 2009, Gramercy entered into lease agreements with an affiliate of ours, for their corporate offices at 420 Lexington Avenue, New York, NY. The first lease is for approximately 7,300 square feet and carries a term of ten years with rents of approximately $249,000 per annum for year one increasing to $315,000 per annum in year ten. The second lease is for approximately 900 square feet pursuant to a lease which ends in April 2015, with annual rent under this lease of approximately $35,300 per annum for year one increasing to $42,800 per annum in year six. The third lease is for approximately 1,400 square feet pursuant to a lease which ends in April 2015, with annual rent under this lease of approximately $67,300 per annum for year one increasing to $80,500 per annum in year six.
Gramercy holds tenancy-in-common interests along with us in 2 Herald Square and 885 Third Avenue. See Note 5 for information on our structured finance investments in which Gramercy also holds an interest.
An affiliate of ours held an investment in Gramercys preferred stock with a market value of approximately $0.5 million at June 30, 2010.
On October 27, 2009, Marc Holliday, our Chief Executive Officer, Andrew Mathias, our President and Chief Investment Officer and Gregory F. Hughes, our Chief Financial Officer and Chief Operating Officer resigned as Chief Executive Officer, Chief Investment Officer and Chief Credit Officer, respectively, of Gramercy. Mr. Holliday also resigned as President of Gramercy effective as of October 28, 2009. Mr. Holliday and Mr. Mathias agreed to remain as consultants to Gramercy through the earliest of (i) September 30, 2009, (ii) the termination of the Second Amended Management Agreement or (iii) the termination of their respective employment with us. This agreement was terminated in connection with the GKK Internalization.
On October 28, 2009, Gramercy announced the appointment of Roger M. Cozzi, as President and Chief Executive Officer, effective immediately. Effective as of November 13, 2009, Timothy J. OConnor was appointed as President of Gramercy. Mr. Holliday remains a board member of Gramercy.
In 2009, we, as well as an affiliate of ours, entered into consulting agreements with Gramercy whereby Gramercy provides services required for the evaluation, acquisition, disposition and portfolio management of CMBS investments. We pay 10 basis points and our affiliate pays 25 basis points of the principal amount of all trades executed. We and our affiliate paid approximately $48,000 in fees for such services during the six months ended June 30, 2010.
SL Green Realty Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 2010
The condensed combined balance sheets for the unconsolidated joint ventures, at June 30, 2010 and December 31, 2009, are as follows (in thousands):
|
|
2010 |
|
2009 |
|
||
Assets |
|
|
|
|
|
||
Commercial real estate property, net |
|
$ |
5,397,505 |
|
$ |
6,095,668 |
|
Other assets |
|
593,229 |
|
665,065 |
|
||
Total assets |
|
$ |
5,990,734 |
|
$ |
6,760,733 |
|
|
|
|
|
|
|
||
Liabilities and members equity |
|
|
|
|
|
||
Mortgages payable |
|
$ |
4,096,357 |
|
$ |
4,177,382 |
|
Other liabilities |
|
248,091 |
|
276,805 |
|
||
Members equity |
|
1,646,286 |
|
2,306,546 |
|
||
Total liabilities and members equity |
|
$ |
5,990,734 |
|
$ |
6,760,733 |
|
Companys net investment in unconsolidated joint ventures |
|
$ |
775,765 |
|
$ |
1,058,369 |
|
The condensed combined statements of operations for the unconsolidated joint ventures for the three and six months ended June 30, 2010 and 2009, or partial period for acquisitions which closed during these periods, are as follows (in thousands):
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|