Table of Contents

 


 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

þ         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2011

 

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

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

420 Lexington Avenue, New York, New York 10170

(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.  YES þ     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 þ    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 þ

Accelerated filer o

Non-accelerated filer o
(Do not check if a
smaller reporting company)

Smaller Reporting Company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  o    NO þ

 

The number of shares outstanding of the registrant’s common stock, $0.01 par value, was 85,464,921 as of July 31, 2011.

 



Table of Contents

 

SL GREEN REALTY CORP.

 

INDEX

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

 

PAGE

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010

 

3

 

 

 

 

 

Consolidated Statements of Income for the three and six months ended June 30, 2011 and 2010 (unaudited)

 

4

 

 

 

 

 

Consolidated Statement of Equity for the six months ended June 30, 2011 (unaudited)

 

5

 

 

 

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (unaudited)

 

6

 

 

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

7

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

53

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

54

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

54

 

 

 

 

PART II.

OTHER INFORMATION

 

55

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

 

55

 

 

 

 

ITEM 1A.

RISK FACTORS

 

55

 

 

 

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

55

 

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

55

 

 

 

 

ITEM 4.

(REMOVED AND RESERVED)

 

55

 

 

 

 

ITEM 5.

OTHER INFORMATION

 

55

 

 

 

 

ITEM 6.

EXHIBITS

 

56

 

 

 

 

SIGNATURES

 

57

 

2



Table of Contents

 

PART I.                  FINANCIAL INFORMATION

ITEM 1.                  Financial Statements

SL Green Realty Corp.

Consolidated Balance Sheets

(Amounts in thousands, except per share data)

 

 

 

June 30,
2011

 

December 31,
2010

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Commercial real estate properties, at cost:

 

 

 

 

 

Land and land interests

 

$

2,472,584

 

$

1,750,220

 

Building and improvements

 

6,835,204

 

5,840,701

 

Building leasehold and improvements

 

1,289,664

 

1,286,935

 

Property under capital lease

 

12,208

 

12,208

 

 

 

10,609,660

 

8,890,064

 

Less: accumulated depreciation

 

(1,008,064

)

(916,293

)

 

 

9,601,596

 

7,973,771

 

Cash and cash equivalents

 

390,229

 

332,830

 

Restricted cash

 

85,370

 

137,673

 

Investment in marketable securities

 

55,366

 

34,052

 

Tenant and other receivables, net of allowance of $16,548 and $12,981 in 2011 and 2010, respectively

 

28,452

 

27,054

 

Related party receivables

 

2,579

 

6,295

 

Deferred rents receivable, net of allowance of $29,352 and $30,834 in 2011 and 2010, respectively

 

244,008

 

201,317

 

Debt and preferred equity investments, net of discount of $19,351 and $42,937 and allowance of $41,800 and $61,361 in 2011 and 2010, respectively

 

582,418

 

963,772

 

Investments in unconsolidated joint ventures

 

896,632

 

631,570

 

Deferred costs, net

 

182,241

 

172,517

 

Other assets

 

575,187

 

819,443

 

Total assets

 

$

12,644,078

 

$  

11,300,294

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Mortgages and other loans payable

 

$

3,978,345

 

$

3,400,468

 

Revolving credit facility

 

500,000

 

650,000

 

Senior unsecured notes

 

1,019,240

 

1,100,545

 

Accrued interest payable and other liabilities

 

102,710

 

38,149

 

Accounts payable and accrued expenses

 

130,735

 

133,389

 

Deferred revenue/gains

 

300,093

 

307,678

 

Capitalized lease obligation

 

17,077

 

17,044

 

Deferred land leases payable

 

18,322

 

18,267

 

Dividend and distributions payable

 

14,861

 

14,182

 

Security deposits

 

43,032

 

38,690

 

Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities

 

100,000

 

100,000

 

Total liabilities

 

6,224,415

 

5,818,412

 

 

 

 

 

 

 

Commitments and contingencies

 

---

 

---

 

 

 

 

 

 

 

Noncontrolling interest in operating partnership

 

158,418

 

84,338

 

 

 

 

 

 

 

Equity

 

 

 

 

 

SL Green stockholders’ equity:

 

 

 

 

 

Series C preferred stock, $0.01 par value, $25.00 liquidation preference, 11,700 issued and outstanding at both June 30, 2011 and December 31, 2010, respectively

 

274,022

 

274,022

 

Series D preferred stock, $0.01 par value, $25.00 liquidation preference, 4,000 issued and outstanding at both June 30, 2011 and December 31, 2010, respectively

 

96,321

 

96,321

 

Common stock, $0.01 par value 160,000 shares authorized and 87,723 and 81,675 issued and outstanding at June 30, 2011 and December 31, 2010, respectively (including 3,426 and 3,369 shares at June 30, 2011 and December 31, 2010, held in Treasury, respectively)

 

878

 

817

 

Additional paid-in-capital

 

4,105,442

 

3,660,842

 

Treasury stock at cost

 

(307,419

)

(303,222

)

Accumulated other comprehensive loss

 

(21,589

)

(22,659

)

Retained earnings

 

1,721,440

 

1,172,963

 

Total SL Green stockholders’ equity

 

5,869,095

 

4,879,084

 

Noncontrolling interests in other partnerships

 

392,150

 

518,460

 

Total equity

 

6,261,245

 

5,397,544

 

Total liabilities and equity

 

$

12,644,078

 

$

11,300,294

 

 

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

 

3



Table of Contents

 

SL Green Realty Corp.

Consolidated Statements of Income

(Unaudited, and amounts in thousands, except per share data)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues

 

 

 

 

 

 

 

 

 

Rental revenue, net

$

240,585

$

193,252

$

469,555

$

385,462

 

Escalation and reimbursement

 

34,994

 

28,655

 

65,269

 

58,749

 

Investment and preferred equity income

 

15,144

 

20,788

 

79,823

 

41,167

 

Other income

 

9,932

 

8,877

 

17,180

 

17,075

 

Total revenues

 

300,655

 

251,572

 

631,827

 

502,453

 

Expenses

 

 

 

 

 

 

 

 

 

Operating expenses (including approximately $3,498 and $6,613 (2011) and $3,077 and $6,180 (2010) paid to affiliates)

 

62,406

 

52,748

 

122,710

 

109,531

 

Real estate taxes

 

43,975

 

37,194

 

84,042

 

74,166

 

Ground rent

 

7,813

 

7,679

 

15,647

 

15,501

 

Interest expense, net of interest income

 

68,990

 

56,941

 

134,063

 

113,729

 

Amortization of deferred financing costs

 

2,690

 

1,571

 

6,496

 

3,867

 

Depreciation and amortization

 

65,539

 

55,373

 

129,036

 

110,898

 

Loan loss and other investment reserves, net of recoveries

 

1,280

 

4,985

 

(1,870

)

10,985

 

Transaction related costs

 

1,217

 

4,104

 

3,651

 

5,162

 

Marketing, general and administrative

 

22,454

 

18,379

 

42,475

 

36,778

 

Total expenses

 

276,364

 

238,974

 

536,250

 

480,617

 

Income from continuing operations before equity in net income of unconsolidated joint ventures, noncontrolling interests and discontinued operations

 

24,291

 

12,598

 

95,577

 

21,836

 

Equity in net income from unconsolidated joint ventures

 

2,184

 

10,005

 

10,390

 

25,381

 

Equity in net gain on sale of interest in unconsolidated joint venture

 

---

 

126,769

 

---

 

126,769

 

Purchase price fair value adjustment

 

475,102

 

---

 

488,890

 

---

 

Loss on investment in marketable securities

 

(6

)

---

 

(133

)

(285

)

Gain (loss) on early extinguishment of debt

 

971

 

(1,276

)

971

 

(1,389

)

Income from continuing operations

 

502,542

 

148,096

 

595,695

 

172,312

 

Net income from discontinued operations

 

560

 

2,403

 

1,298

 

4,320

 

Gain on sale of discontinued operations

 

46,085

 

---

 

46,085

 

---

 

Net income

 

549,187

 

150,499

 

643,078

 

176,632

 

Net income attributable to noncontrolling interests in the operating partnership

 

(11,925

)

(2,467

)

(13,776

)

(2,758

)

Net income attributable to noncontrolling interests in other partnerships

 

(3,259

)

(3,449

)

(6,869

)

(7,097

)

Net income attributable to SL Green

 

534,003

 

144,583

 

622,433

 

166,777

 

Preferred stock dividends

 

(7,545

)

(7,545

)

(15,089

)

(14,660

)

Net income attributable to SL Green common stockholders

$

 526,458

$

137,038

$

607,344

$

152,117

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to SL Green common stockholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

480,858

$

134,675

$

561,015

$

147,874

 

Net income from discontinued operations

 

548

 

2,363

 

1,269

 

4,243

 

Gain on sale of discontinued operations

 

45,052

 

---

 

45,060

 

----

 

Net income

$

526,458

$

137,038

$

607,344

$

152,117

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

Net income from continuing operations before discontinued operations

$

5.75

$

0.13

$

6.87

$

0.30

 

Net income from discontinued operations

 

0.01

 

0.03

 

0.02

 

0.05

 

Gain on sale of discontinued operations

 

0.54

 

---

 

0.55

 

---

 

Gain on sale of interest in unconsolidated joint venture

 

---

 

1.60

 

---

 

1.60

 

Net income attributable to SL Green common stockholders

$

6.30

$

1.76

$

7.44

$

1.95

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Net income from continuing operations before discontinued operations

$

5.71

$

0.13

$

6.84

$

0.30

 

Net income from discontinued operations

 

0.01

 

0.03

 

0.02

 

0.05

 

Gain on sale of discontinued operations

 

0.54

 

---

 

0.54

 

---

 

Gain on sale of interest in unconsolidated joint venture

 

---

 

1.59

 

---

 

1.59

 

Net income attributable to SL Green common stockholders

$

6.26

$

1.75

$

7.40

$

1.94

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.10

$

0.10

$

0.20

$

0.20

 

Basic weighted average common shares outstanding

 

83,578

 

78,046

 

81,632

 

77,936

 

Diluted weighted average common shares and common share equivalents outstanding

 

86,010

 

79,791

 

83,995

 

79,771

 

 

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

 

4



Table of Contents

 

SL Green Realty Corp.

Consolidated Statement of Equity

(Unaudited, and amounts in thousands, except per share data)

 

 

 

SL Green Realty Corp. Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series C
Preferred
Stock

 

Series D
Preferred
Stock

 

Shares

 

Par
Value

 

Additional
Paid-
In-Capital

 

Treasury
Stock

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Retained
Earnings

 

Noncontrolling
Interests

 

Total

 

Comprehensive
Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2010

 

$

274,022

 

$

96,321

 

78,307

 

$

817

 

$

3,660,842

 

$

(303,222

)

$

(22,659

)

$

1,172,963

 

$

518,460

 

$

5,397,544

 

 

 

Comprehensive Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

622,433

 

6,869

 

629,302

 

$

629,302

 

Net unrealized loss on derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,835

)

 

 

 

 

(2,835

)

(2,835)

 

SL Green’s share of joint venture net unrealized gain on derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

3,417

 

 

 

 

 

3,417

 

3,417

 

Unrealized gains on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

488

 

 

 

 

 

488

 

488

 

Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,089

)

 

 

(15,089

)

 

 

Redemption of units and DRIP proceeds

 

 

 

 

 

11

 

-

 

731

 

 

 

 

 

 

 

 

 

731

 

 

 

Reallocation of noncontrolling interest in the operating partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,296

)

 

 

(42,296

)

 

 

Deferred compensation plan & stock award, net

 

 

 

 

 

249

 

3

 

542

 

(4,197

)

 

 

 

 

 

 

(3,652

)

 

 

Amortization of deferred compensation plan

 

 

 

 

 

 

 

 

 

16,831

 

 

 

 

 

 

 

 

 

16,831

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

5,572

 

56

 

419,407

 

 

 

 

 

 

 

 

 

419,463

 

 

 

Proceeds from stock options exercised

 

 

 

 

 

158

 

2

 

7,089

 

 

 

 

 

 

 

 

 

7,091

 

 

 

Consolidation of joint venture interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

533

 

533

 

 

 

Cash distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(133,712

)

(133,712

)

 

 

Cash distribution declared ($0.20 per common share, none of which represented a return of capital for federal income tax purposes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,571

)

 

 

(16,571

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2011

 

$

274,022

 

$

96,321

 

84,297

 

$

878

 

$

4,105,442

 

$

(307,419

)

$

(21,589

)

$

1,721,440

 

$

392,150

 

$

6,261,245

 

$

630,372

 

 

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

 

5



Table of Contents

 

SL Green Realty Corp.

Consolidated Statements of Cash Flows

(Unaudited, and amounts in thousands, except per share data)

 

 

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

Operating Activities

 

 

 

 

 

Net income

$

643,078

$

176,632

 

Adjustment to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

136,355

 

118,265

 

Equity in net income from unconsolidated joint ventures

 

(10,390

)

(25,381

)

Distributions of cumulative earnings from unconsolidated joint ventures

 

7,866

 

15,965

 

Equity in net gain on sale of interest in unconsolidated joint venture

 

---

 

(126,769

)

Purchase price fair value adjustment

 

(488,890

)

---

 

Gain on sale of discontinued operations

 

(46,085

)

---

 

Gain on sale of debt securities

 

(19,840

)

---

 

Loan loss and other investment reserves, net of recoveries

 

(1,870

)

10,985

 

Loss on investments in marketable securities

 

133

 

285

 

(Gain) loss on early extinguishment of debt

 

(971

)

1,389

 

Deferred rents receivable

 

(44,343

)

(19,177

)

Other non-cash adjustments

 

3,774

 

(11,851

)

Changes in operating assets and liabilities:

 

 

 

 

 

Restricted cash – operations

 

15,487

 

(5,468

)

Tenant and other receivables

 

(841

)

3,893

 

Related party receivables

 

1,157

 

2,671

 

Deferred lease costs

 

(14,534

)

(13,775

)

Other assets

 

5,169

 

12,109

 

Accounts payable, accrued expenses and other liabilities

 

(5,323

)

16,705

 

Deferred revenue and land leases payable

 

(3,084

)

(3,824

)

Net cash provided by operating activities

 

176,848

 

152,654

 

Investing Activities

 

 

 

 

 

Acquisitions of real estate property

 

(331,972

)

---

 

Additions to land, buildings and improvements

 

(57,442

)

(34,594

)

Escrowed cash – capital improvements/acquisition deposits

 

46,861

 

(54,076

)

Investments in unconsolidated joint ventures

 

(60,321

)

(81,903

)

Distributions in excess of cumulative earnings from unconsolidated joint ventures

 

102,089

 

10,339

 

Net proceeds from disposition of real estate/joint venture interest

 

150,893

 

504,172

 

Other investments

 

631

 

(7,611

)

Debt and preferred equity and other investments, net of repayments/participations

 

84,528

 

(89,428

)

Net cash (used in) provided by investing activities

 

(64,733

)

246,899

 

Financing Activities

 

 

 

 

 

Proceeds from mortgages and other loans payable

 

690,000

 

104,100

 

Repayments of mortgages and other loans payable

 

(744,873

)

(20,925

)

Proceeds from revolving credit facility and senior unsecured notes

 

725,079

 

250,000

 

Repayments of revolving credit facility and senior unsecured notes

 

(962,395

)

(792,543

)

Proceeds from stock options exercised and DRIP issuance

 

7,097

 

13,989

 

Net proceeds from sale of common stock

 

419,463

 

---

 

Net proceeds from sale of preferred stock

 

---

 

122,019

 

Purchase of treasury stock

 

(4,197

)

---

 

Distributions to noncontrolling interests in other partnerships

 

(133,712

)

(6,814

)

Redemption of noncontrolling interest in operating partnership

 

---

 

(11,096

)

Distributions to noncontrolling interests in operating partnership

 

(382

)

(262

)

Dividends paid on common and preferred stock

 

(31,662

)

(28,223

)

Deferred loan costs and capitalized lease obligation

 

(19,134

)

(33,936

)

Net cash used in financing activities

 

(54,716

)

(403,691

)

Net increase (decrease) in cash and cash equivalents

 

57,399

 

(4,138

)

Cash and cash equivalents at beginning of period

 

332,830

 

343,715

 

Cash and cash equivalents at end of period

$

390,229

$

339,577

 

 

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

 

6



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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, a consolidated variable interest entity.  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 the “Company,” “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, 2011, noncontrolling investors held, in the aggregate, a 2.22% limited partnership interest in the operating partnership.  We refer to this as the noncontrolling interests in the operating partnership.  See Note 13.

 

Reckson Operating Partnership, L.P., or ROP, is a subsidiary of our Operating Partnership.

 

As of June 30, 2011, we owned the following interests in commercial office properties in the New York Metropolitan area, primarily in midtown Manhattan, a borough of New York City, or Manhattan.  Our investments in the New York Metropolitan 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
Properties

 

Square Feet

 

Weighted Average
Occupancy
(1)

 

Manhattan

 

Consolidated properties

 

24

 

 

17,197,945

 

 

92.8

 %

 

 

Unconsolidated properties

 

7

 

 

6,191,673

 

 

92.5

 %

 

 

 

 

 

 

 

 

 

 

 

 

Suburban

 

Consolidated properties

 

25

 

 

3,863,000

 

 

81.0

 %

 

 

Unconsolidated properties

 

6

 

 

2,941,700

 

 

93.6

 %

 

 

 

 

62

 

 

30,194,318

 

 

91.3

 %

 


(1)     The weighted average occupancy represents the total leased square feet divided by total available rentable square feet.

 

We also owned investments in nine stand-alone retail properties encompassing approximately 334,782 square feet, six development properties encompassing approximately 1,359,941 square feet and three land interests as of June 30, 2011.  In addition, we manage four office properties owned by third parties and affiliated companies encompassing approximately 1.3 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.

 

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 fair presentation have been included.  The 2011 operating results for the period presented are not necessarily indicative of the

 

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Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

results that may be expected for the year ending December 31, 2011.  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, 2010.

 

The balance sheet at December 31, 2010 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 debt and preferred equity investments.  See Notes 5 and 6.  All significant intercompany balances and transactions have been eliminated.

 

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 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.

 

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 debt and preferred equity investment.  This assessment includes a review of each joint venture or partnership limited liability company agreement to determine which party has what rights and whether those rights are protective or participating.  For all VIE’s, we review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity’s economic performance.  In situations where we or our partner approves, among other things, the annual budget, receives 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 venture’s 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.

 

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 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 and without interest charges for consolidated 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.  In addition, we assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value.  We evaluate our equity investments for impairment based on the joint venture’s projected discounted cash flows. We do not believe that the value of any of our consolidated properties was impaired at June 30, 2011 or December 31, 2010, respectively.

 

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

 

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Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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 $5.0 million, $12.2 million, $6.2 million and $12.8 million in rental revenue for the three and six months ended June 30, 2011 and 2010, 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 $1.8 million, $3.2 million, $0.6 million and $0.9 million for the three and six months ended June 30, 2011 and 2010, 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,
2011

 

December 31,
2010

 

Identified intangible assets (included in other assets):

 

 

 

 

 

Gross amount

$

567,046

$

758,300

 

Accumulated amortization

 

(157,411

)

(133,737

)

Net

$

409,635

$

624,563

 

 

 

 

 

 

 

Identified intangible liabilities (included in deferred revenue):

 

 

 

 

 

Gross amount

$

534,227

$

508,339

 

Accumulated amortization

 

(252,753

)

(220,417

)

Net

$

281,474

$

287,922

 

 

Fair Value Measurements

Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

 

We determined the fair value of our current investments in marketable securities using level one, level two and level three inputs. Additionally, we determined the valuation allowance for loan losses based on level three inputs. See “Note 5—Debt and Preferred Equity Investments.”

 

The estimated fair values of tangible and intangible assets and liabilities recorded in connection with business combinations are based on level three inputs. We estimate fair values based on cash flow projections utilizing appropriate discount and/or capitalization rates and available market information.

 

We determine impairment in real estate investments and debt and preferred equity investments, including intangibles, utilizing cash flow projections that apply estimated revenue and expense growth rates, discount rates and capitalization rates, which are classified as level three inputs.

 

We use the following methods and assumptions in estimating fair value disclosures for financial instruments.

 

·                  Cash and cash equivalents:  The carrying amount of unrestricted cash and cash equivalents reported in our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.

 

·                  Debt and Preferred Equity Investments:  The fair value of debt and preferred equity investments 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. See Note 5 regarding valuation allowances for loan losses.

 

·                  Mortgage and other loans payable and other debt:  The fair value of borrowings is estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made by us.

 

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Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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 and nonrecurring basis. The classifications are based on the lowest level of input that is significant to the fair value measurement.

 

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 up to their credit component. Included in accumulated other comprehensive loss at June 30, 2011 is approximately $10.6 million in net unrealized gains related to marketable securities.

 

The basis on which the cost of bonds and marketable securities sold is determined based on the specific identification method.

 

At June 30, 2011 and December 31, 2010, we held the following marketable securities (in thousands):

 

 

 

June 30,

 

December 31,

 

 

 

2011

 

2010

 

Level 1 – Equity marketable securities

$

16,209

$

12,357

 

Level 2 – Commercial mortgage-backed securities

 

15,672

 

17,445

 

Level 3 – Rake bonds

 

23,485

 

4,250

 

Total marketable securities available-for-sale

$

55,366

$

34,052

 

 

The cost basis of the Level 3 securities was $26.5 million at June 30, 2011 and $4.3 million at December 31, 2010. There were no sales of Level 3 securities during the six months ended June 30, 2011. The Level 3 securities mature at various times through 2041.

 

Revenue Recognition

Interest income on debt and preferred equity investments is recognized over the life of the investment using the effective interest method and recognized on the accrual basis.  Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan as an adjustment to yield.  Anticipated exit fees, whose collection is expected, are also recognized over the term of the loan as an adjustment to yield.  Fees on commitments that expire unused are recognized at expiration.

 

Income recognition is generally suspended for debt and preferred equity investments 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 income and principal becomes doubtful.  Income recognition is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. Interest is recorded as income on impaired loans only to the extent cash is received. Several of the 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 and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the borrower. If management cannot make this determination, interest income above the current pay rate is recognized only upon actual receipt.

 

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Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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 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.

 

Reserve for Possible Credit Losses

The expense for possible credit losses in connection with debt and preferred equity 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 on each individual investment.  When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired.

 

Where impairment is indicated on an investment that is held to maturity, 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 loan loss reserves of $2.5 million, $2.5 million, $4.0 million and $10.0 million during the three and six months ended June 30, 2011 and 2010, respectively, on investments being held to maturity, and $1.0 million against our held for sale investment during the three and six months ended June 30, 2010, respectively.  We also recorded approximately $1.2 million and $4.4 million in recoveries during the three and six months ended June 30, 2011 in connection with the sale of investments.

 

Debt and preferred equity 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 investment will be reclassified at its net carrying value to debt and preferred equity investments held to maturity.  For these reclassified investments, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the investment.

 

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 none and approximately $1.3 million in Federal, state and local tax provision during the six months ended June 30, 2011 and 2010, respectively, and made estimated tax payments of $0.1 million and $0.3 million during the six months ended June 30, 2011 and 2010, respectively.

 

We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited.

 

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

 

11



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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 on a straight line basis 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.

 

For share-based awards with a performance or market measure, we recognize compensation cost over the requisite service period, using the accelerated attribution expense method. The requisite service period begins on the date the Compensation Committee authorizes the award and adopts any relevant performance measures. For programs with market measures, the total estimated compensation cost is based on the fair value of the award at the applicable reporting date estimated using a binomial model. For share-based awards for which there is no pre-established performance measure, we recognize compensation cost over the service vesting period, which represents the requisite service period, on a straight-line basis. In accordance with the provisions of our share-based incentive compensation plans, we accept the return of shares of Company common stock, at the current quoted market price, from certain key employee to satisfy minimum statutory tax-withholding requirements related to shares that vested during the period.

 

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 attributable to common stockholders by the weighted average number of common shares outstanding during the period. Basic EPS includes participating securities, consisting of unvested restricted stock that receive nonforfeitable dividends similar to shares of common stock. 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. The dilutive effect of the outstanding nonvested shares of common stock (“nonvested shares”) and restricted stock units (“RSUs”) that have not yet been granted but are contingently issuable under the share-based compensation programs is reflected in the weighted average diluted shares calculation by application of the treasury stock method at the beginning of the quarterly period in which all necessary conditions have been satisfied. The dilutive effect of stock options is reflected in the weighted average diluted outstanding shares calculation by application of the treasury stock method. There is no dilutive effect for the exchangeable senior debentures as the conversion premium will be paid in cash.

 

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, debt and preferred equity investments and accounts receivable.  We place our cash investments in excess of insured amounts with high quality financial institutions.  The collateral securing our debt and preferred equity investments is primarily located in the New York Metropolitan area. See Note 5. We perform ongoing credit evaluations of our tenants and require most tenants to provide security deposits or letters of credit.  Though these security deposits and letters of credit are insufficient to meet the total value of a tenant’s lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost 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 7.5% of our annualized rent, no other tenant in our portfolio accounted for more than 7.1% of our annualized rent, including our share of joint venture annualized rent at June 30, 2011. Approximately 9.6%, 6.8% and 5.6% of our annualized rent, including our share of joint venture annualized rent, was attributable to 1515 Broadway, 1185 Avenue of the Americas and One Madison Avenue, respectively, for the quarter ended June 30, 2011.  Two borrowers accounted for more than 10.0% of the revenue earned on debt and preferred equity investments during the three months ended June 30, 2011.

 

Reclassification

Certain prior year balances have been reclassified to conform to our current year presentation primarily in order to eliminate discontinued operations from income from continuing operations.

 

Accounting Standards Updates

In July 2010, the FASB issued updated guidance on disclosures about the credit quality of financing receivables and the allowance for

 

12



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

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. The guidance related to disclosures of financing receivables as of the end of a reporting period is required to be adopted for interim and annual reporting periods ending on or after December 15, 2010. The financing receivables disclosures related to the activity that occurs during a reporting period are required to be adopted for interim and annual reporting periods beginning on or after December 15, 2010.  In January 2011, the FASB temporarily delayed the effective date of the disclosures about troubled debt restructurings to allow the FASB the time needed to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings and the guidance for determining what constitutes a troubled debt restructuring will then be coordinated. The guidance is effective for interim and annual periods ending after June 15, 2011. Adoption of the remaining guidance resulted in additional disclosures in 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. Adoption of this guidance on January 1, 2010, excluding the Level 3 rollforward, resulted in additional disclosures in our consolidated financial statements. The gross presentation of the Level 3 rollforward is required for interim and annual reporting periods beginning after December 15, 2010. Adoption of this guidance did not have a material impact on our consolidated financial statements.

 

In December 2010, the FASB issued guidance on the disclosure of supplementary pro forma information for business combinations. Effective for periods beginning after December 15, 2010, the guidance specifies that if a public entity enters into business combinations that are material on an individual or aggregate basis and presents comparative financial statements, the entity must present pro forma revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Adoption of this guidance did not have a material impact on our consolidated financial statements.

 

In June 2011, the FASB issued guidance to increase the prominence of other comprehensive income in financial statements. The standard gives businesses two options for presenting other comprehensive income (OCI), which until now has typically been included within the statement of shareholder’s equity. An OCI statement can be included with the statement of income, and together the two will make a statement of total comprehensive income. Alternatively, businesses can have an OCI statement separate from the statement of income, but the two statements will have to appear consecutively within a financial report. These disclosure requirements are effective for interim and annual reporting periods beginning after December 15, 2011. Early adoption of this guidance is permitted. Adoption of this guidance will not have a material impact on our consolidated financial statements.

 

In April 2011, the FASB issued updated guidance on a creditor’s determination of whether a restructuring will be a troubled debt restructuring, which establishes new guidelines in evaluating whether a loan modification meets the criteria of a troubled debt restructuring.  This guidance is effective as of the third quarter of 2011, applied retrospectively to the beginning of the fiscal year as required, and its adoption is not expected to have a material effect on our consolidated financial statements.

 

In May 2011, the FASB issued updated guidance on fair value measurement which amends U.S. GAAP to conform to IFRS measurement and disclosure requirements.  The amendments change the wording used to describe the requirements in U.S. GAAP for measuring fair value, changes certain fair value measurement principles and enhances disclosure requirements.  This guidance is effective as of the first quarter of 2012, applied prospectively, and its adoption is not expected to have a material effect on our consolidated financial statements.

 

3.  Property Acquisitions

 

In May 2011, we acquired a substantial ownership interest in the 205,000-square-foot office condominium at 110 East 42nd Street, along with control of the asset. We provided a senior mezzanine loan as part of the sale of the condominium unit in 2007. The May 2011 transaction included a consensual modification of that loan. In conjunction with the transaction, we successfully restructured the in-place mortgage financing, which had previously been in default. We are in the process of obtaining the information needed to prepare our allocation of the purchase price of the assets acquired and liabilities assumed and expect to record these adjustments in the

 

13



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

third quarter of 2011. We are in the process of analyzing the fair value of the in-place leases; and, consequently, no value has yet been assigned to the leases. Therefore, the purchase price allocation is preliminary and subject to change.

 

In April 2011, we acquired the entire interest of SITQ Immobilier, a subsidiary of Caisse de depot et placement du Quebec, or SITQ’s, in 1515 Broadway, thereby consolidating full ownership of the 1,750,000 square foot building. The transaction valued the consolidated interests at $1.234 billion. We acquired the interest subject to the $458.8 million mortgage encumbering the property. We recognized a purchase price fair value adjustment of $475.1 million upon the closing of this transaction. This property, which we initially acquired in May 2002, was previously accounted for as an investment in unconsolidated joint ventures. We are currently in the process of analyzing the fair value of the in-place leases; and, consequently, no value has yet been assigned to the leases. Therefore, the purchase price allocation is preliminary and subject to change.

 

In January 2011, we purchased City Investment Fund, or CIF’s, 49.9% interest in 521 Fifth Avenue, thereby assuming full ownership of the building. The transaction valued the consolidated interest at approximately $245.7 million, excluding $4.5 million of cash and other assets acquired. We acquired the interest subject to $140.0 million of mortgage financing in connection with this acquisition. We recognized a purchase price fair value adjustment of $13.8 million upon the closing of this transaction. In April 2011, we refinanced 521 Fifth Avenue with a new $150.0 million 2-year mortgage which carries a floating rate of interest of 200 basis points over the 30-day LIBOR In connection with that refinancing, we acquired the fee interest in the property for $15.0 million.

 

The following summarizes our preliminary allocation of the purchase price of the assets acquired and liabilities assumed upon the purchase of 521 Fifth Avenue (in thousands):

 

Land

$  

110,100

 

Building

 

146,369

 

Above market lease value

 

3,278

 

Acquired in-place leases

 

23,009

 

Other assets, net of other liabilities

 

4,532

 

Assets acquired

 

287,288

 

 

 

 

 

Mortgage note payable

 

140,000

 

Below market lease value

 

25,612

 

Liabilities assumed

 

165,612

 

 

 

121,676

 

Investment in unconsolidated joint ventures

 

(41,414

)

Net assets acquired

$  

80,262

 

 

In December 2010, we completed the acquisition of investments from Gramercy Capital Corp. (NYSE:GKK), or Gramercy. This included (1) the remaining 45% interest in the leased fee at 885 Third Avenue for approximately $39.3 million plus assumed mortgage debt of approximately $120.4 million, (2) the remaining 45% interest in the leased fee at 2 Herald Square for approximately $25.6 million plus assumed mortgage debt of approximately $86.1 million and, (3) the entire leased fee interest in 292 Madison Avenue for approximately $19.2 million plus assumed mortgage debt of approximately $59.1 million. These assets are all leased to third-party operators.

 

14



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

The following summarizes our allocation of the purchase price of the assets acquired and liabilities assumed upon the purchase of the abovementioned investments from Gramercy (in thousands):

 

Land

$  

501,021

 

Above market lease value

 

23,178

 

Acquired in-place leases

 

217,312

 

Assets acquired

 

741,511

 

 

 

 

 

Mortgage notes payable

 

540,805

 

Other liabilities, net of other assets

 

2,091

 

Liabilities assumed

 

542,896

 

 

 

198,615

 

Investments in unconsolidated joint ventures

 

(111,751

)

Net assets acquired

$  

86,864

 

 

In December 2010, we acquired two retail condominiums in Williamsburg, Brooklyn, for approximately $18.4 million. The retail condominiums are fully leased with rent commencement upon completion of the redevelopment work.

 

The following summarizes our allocation of the purchase price of the assets acquired in connection with the purchase of the abovementioned property (in thousands):

 

Land

$  

6,200

 

Building

 

10,158

 

Acquired in-place leases

 

2,304

 

Assets acquired

 

18,662

 

Below market lease value

 

277

 

Liabilities assumed

 

277

 

Net assets acquired

$  

18,385

 

 

4.  Property Dispositions and Assets Held for Sale

 

In May 2011, we sold our property located at 28 West 44th Street for $161.0 million. The property is approximately 359,000 square feet. We recognized a gain of $46.1 million on the sale.

 

At June 30, 2011, discontinued operations included the results of operations of real estate assets sold or held for sale prior to that date. This included 28 West 44th Street, which was sold in May 2011 and 19 West 44th Street, which was sold in September 2010.

 

15



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

The following table summarizes income from discontinued operations for the three and six months ended June 30, 2011 and 2010, respectively (in thousands).

 

 

 

Three
Months

Ended

 

Three
Months
Ended

 

Six
Months

Ended

 

Six
Months
Ended

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues

 

 

 

 

 

 

 

 

 

Rental revenue

$

 1,245

$

 6,467

$

 4,835

$

 12,843

 

Escalation and reimbursement revenues

 

219

 

1,306

 

873

 

2,680

 

Other income

 

56

 

378

 

60

 

379

 

Total revenues

 

1,520

 

8,151

 

5,768

 

15,902

 

Operating expense

 

487

 

1,873

 

1,633

 

3,854

 

Real estate taxes

 

187

 

1,415

 

1,034

 

2,829

 

Interest expense, net of interest income

 

286

 

708

 

980

 

1,399

 

Amortization of deferred financing costs

 

---

 

220

 

147

 

441

 

Depreciation and amortization

 

---

 

1,532

 

676

 

3,059

 

Total expenses

 

960

 

5,748

 

4,470

 

11,582

 

Income from discontinued operations

$

 560

$

 2,403

$

 1,298

$

 4,320

 

 

5.  Debt and Preferred Equity Investments

 

During the six months ended June 30, 2011 and 2010, our debt and preferred equity investments (net of discounts), increased approximately $162.9 million and $181.2 million, respectively, due to originations, purchases, accretion of discounts and paid-in-kind interest.  We recorded approximately $544.3 million and $99.4 million in repayments, participations, sales, foreclosures and loan loss reserves during those periods, respectively, which offset the increases in debt and preferred equity investments.

 

16



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

As of June 30, 2011 and December 31, 2010, we held the following debt investments with an aggregate weighted average current yield of approximately 5.99% (in thousands):

 

Loan
Type

 

June 30,
2011
Senior
Financing

 

June 30,
2011
Principal
Outstanding

 

December 31,
2010
Principal
Outstanding

 

Initial
Maturity
Date

 

Other Loan(1)

$

15,000

$

3,500

$

3,500

 

September 2021

 

Mezzanine Loan(1)

 

205,000

 

63,711

 

60,407

 

February 2016

 

Mortgage/ Mezzanine Loan(1)

 

172,669

 

46,380

 

46,358

 

May 2016

 

Mezzanine Loan(1)

 

165,000

 

40,282

 

39,711

 

November 2016

 

Mezzanine Loan(1)(2)(3)(6)(7)

 

---

 

---

 

27,187

 

---

 

Mezzanine Loan(1) (7)(14)

 

---

 

---

 

15,697

 

---

 

Junior Participation(1)(4)(6)(7)

 

---

 

9,938

 

9,938

 

April 2008

 

Mezzanine Loan(1)(7)(8)

 

1,139,000

 

83,378

 

84,062

 

March 2017

 

Junior Participation(1)(6)

 

53,000

 

11,000

 

11,000

 

November 2011

 

Junior Participation(6)

 

61,250

 

10,875

 

10,875

 

June 2012

 

Junior Participation(6)

 

---

 

---

 

5,866

 

---

 

Junior Participation(5)(6)

 

---

 

---

 

47,484

 

---

 

Mortgage/ Mezzanine Loan(2)(9)

 

---

 

---

 

137,222

 

---

 

Junior Participation(11)

 

---

 

---

 

42,439

 

---

 

Junior Participation

 

70,800

 

9,200

 

9,200

 

October 2011

 

Mezzanine Loan(1)(12)

 

---

 

---

 

202,136

 

---

 

Mezzanine Loan(1)

 

75,000

 

15,000

 

15,000

 

July 2013

 

Mortgage(10)

 

---

 

86,339

 

86,339

 

June 2012

 

Mortgage(13)

 

---

 

31,500

 

26,000

 

February 2013

 

Mezzanine Loan

 

796,693

 

13,536

 

13,536

 

August 2011

 

Mezzanine Loan(1)

 

165,440

 

38,682

 

38,892

 

February 2014

 

Mezzanine Loan(1)

 

177,000

 

17,668

 

---

 

May 2016

 

Junior Participation(1)

 

133,000

 

49,000

 

---

 

June 2016

 

Loan loss reserve(6)

 

---

 

(18,400

)

(40,461

)

---

 

 

$

3,228,852

$

511,589

$

892,388

 

 

 

 

 


 

 

(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)

This loan was sold in February 2011. We realized $6.2 million of additional income upon the sale. A portion of this income is included in loan loss and other reserves, net of recoveries.

(4)

This loan is in default. The lender has begun foreclosure proceedings. Another participant holds a $12.2 million pari-pasu interest in this loan.

(5)

Gramercy was the borrower under this loan. We sold this loan, which consisted of mortgage and mezzanine financing, for $35.8 million, in May 2011. We realized $1.2 million of additional income upon the sale, which is included in loan loss and other reserves, net of recoveries.

(6)

Loan loss reserves are specifically allocated to investments. Our reserves reflect management’s 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 or that reserves will be adequate over time to protect against potential future losses.

(7)

This loan is on non-accrual status.

(8)

Interest is added to the principal balance for this accrual only loan.

(9)

Gramercy held a pari passu interest in the mezzanine loan. This loan was repaid in March 2011.

(10)

We hold an 88% interest in the consolidated joint venture that acquired this loan. This investment is denominated in British Pounds.

(11)

This loan was repaid in January 2011. We realized $1.3 million of additional income upon the sale. This income is included in preferred equity and investment income.

(12)

In March 2011, we contributed our debt investment with a carrying value of $286.6 million to a newly formed joint venture in which we hold a 50% interest. We realized $38.7 million of additional income upon the contribution. This income is included in preferred equity and investment income. The joint venture paid us approximately $111.3 million and also assumed $30 million of related floating rate financing which matures in June 2016 and carried a weighted average interest rate for the quarter of 1.16%. In May 2011, this joint venture took control of the underlying property as part of a recapitalization transaction. See Note 6.

(13)

In June 2011, we funded an additional $5.5 million and extended the maturity date of this loan to February 2013.

(14)

In May 2011, we acquired a substantial ownership interest in the 205,000-square-foot office condominium along with control of the asset. We provided a senior mezzanine loan as part of the sale of the condominium unit in 2007. The transaction included a consensual modification of that loan. See Note 3.

 

17



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

Preferred Equity Investments

 

As of June 30, 2011 and December 31, 2010, we held the following preferred equity investments, with an aggregate weighted average current yield of approximately 8.35% (in thousands):

 

Type

 

June 30,
 2011
Senior
Financing

 

June 30,
 2011
Amount
Outstanding

 

December 31,
2010

Amount
Outstanding

 

Initial
Mandatory
Redemption

 

Preferred equity(1)(4)(5)

$

203,956

$

47,857

$

45,912

 

February 2014

 

Preferred equity(3)(4)

 

979,175

 

46,372

 

46,372

 

August 2012

 

Loan loss reserve(2)

 

---

 

(23,400

)

(20,900

)

---

 

 

$

1,183,131

$

70,829

$

71,384

 

 

 

 


 

(1)

 

This is a fixed rate investment.

(2)

 

Loan loss reserves are specifically allocated to investments. Our reserves reflect management’s 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.

(3)

 

This investment is on non-accrual status.

(4)

 

The difference between the pay and accrual rates is included as an addition to the principal balance outstanding.

(5)

 

This investment was classified as held for sale at June 30, 2009, but as held-to-maturity for all periods subsequent to June 30, 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, 2011 and December 31, 2010 (in thousands):

 

 

 

June 30,
2011

 

December 31,
2010

 

Balance at beginning of year

$

61,361

$

93,844

 

Expensed

 

2,500

 

24,418

 

Recoveries

 

(4,370

)

(3,662

)

Charge-offs

 

(17,691

)

(53,239

)

Balance at end of period

$

41,800

$

61,361

 

 

At June 30, 2011 and December 31, 2010, all debt and preferred equity investments, other than as noted above, were performing in accordance with the terms of the loan agreements.

 

We have determined that we have one portfolio segment of financing receivables at June 30, 2011 and December 31, 2010 comprising commercial real estate which is primarily recorded in debt and preferred equity investments. Included in other assets is an additional amount of financing receivables totaling approximately $79.5 million at June 30, 2011 and $78.7 million at December 31, 2010. The nonaccrual balance of financing receivables at June 30, 2011 and December 31, 2010 was $85.9 million and $140.8 million, respectively. The recorded investment for financing receivables past due 90 days at June 30, 2011 was $9.9 million associated with one financing receivable and at December 31, 2010 was $9.9 million associated with one financing receivable. All financing receivables are individually evaluated for impairment.

 

The following table presents impaired loans, including non-accrual loans, as of June 30, 2011 and December 31, 2010, respectively (in thousands):

 

 

 

June 30, 2011

 

December 31, 2010

 

 

 

Unpaid Principal
Balance

 

Recorded
Investment

 

Allowance
Allocated

 

Unpaid
Principal
Balance

 

Recorded
Investment

 

Allowance
Allocated

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$101,108

 

$83,378

 

$—

 

$103,678

 

$99,759

 

$—

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

80,173

 

78,060

 

41,800

 

160,711

 

158,597

 

61,361

 

Total

 

$181,281

 

$161,438

 

$41,800

 

$264,389

 

$258,356

 

$61,361

 

 

18



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

The following table presents the average recorded investment in impaired loans, including non-accrual loans and the related investment and preferred equity income recognized during the three and six months ended June 30, 2011 and 2010, respectively (in thousands):

 

 

 

Three Months
Ended

June 30,
2011

 

Three Months
Ended

June 30,
2010

 

Six Months
Ended

June 30,
2011

 

Six Months
Ended

June 30,
2010

 

 

 

 

 

 

 

 

 

 

 

Average recorded investment in impaired loans

$

201,991

$

259,404

$

223,376

$

259,237

 

 

 

 

 

 

 

 

 

 

 

Investment and preferred equity income recognized

 

1,551

 

5,117

 

6,361

 

8,084

 

 

On an ongoing basis, we monitor the credit quality of our financing receivables based on payment activity. We assess credit quality indicators based on the underlying collateral.

 

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, Harel Insurance and Finance, or Harel, Louis Cappelli, or Cappelli, The Moinian Group, or Moinian, Vornado Realty Trust (NYSE: VNO), or Vornado, as well as private investors. As we do not control these joint ventures, we account for them under the equity method of accounting. We assess the accounting treatment for each joint venture on a stand-alone basis. This includes a review of each joint venture or partnership LLC agreement to determine which party has what rights and whether those rights are protective or participating. In situations where we or our partner are involved in some or all of the following: approving the annual budget, receiving a detailed monthly reporting package from us, meeting with us on a quarterly basis to review the results of the joint venture, reviewing and approving the joint venture’s tax return before filing, and approving 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. 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.

 

In May 2010, Green Hill Acquisition LLC, our wholly owned subsidiary, 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 represented 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.

 

19



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

The table below provides general information on each of our joint ventures as of June 30, 2011 (in thousands):

 

Property

 

Partner

 

Ownership
Interest

 

Economic
Interest

 

Square
Feet

 

Acquired

 

Acquisition
Price(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(2)

 

Private Investors

 

42.95%

 

42.95%

 

526

 

12/06

 

$

285,000

 

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

 

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

 

16 Court Street

 

CIF

 

35.00%

 

35.00%

 

318

 

07/07

 

$

107,500

 

The Meadows(3)

 

Onyx

 

50.00%

 

50.00%

 

582

 

09/07

 

$

111,500

 

388 and 390 Greenwich Street(4)

 

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(5)

 

Sutton/Rapport

 

50.00%

 

50.00%

 

22

 

09/05

 

$

13,250

 

180/182 Broadway and 63 Nassau Street(5)(6)

 

Harel/Sutton

 

25.50%

 

25.50%

 

71

 

02/08

 

$

43,600

 

600 Lexington Avenue

 

CPPIB

 

55.00%

 

55.00%

 

304

 

05/10

 

$

193,000

 

11 West 34th Street(7)

 

Private Investor/Sutton

 

30.00%

 

30.00%

 

17

 

12/10

 

$

10,800

 

7 Renaissance

 

Cappelli

 

50.00%

 

50.00%

 

37

 

12/10

 

$

4,000

 

3 Columbus Circle(8)

 

Moinian

 

48.90%

 

48.90%

 

769

 

01/11

 

$

500,000

 

280 Park Avenue(9)

 

Vornado

 

50.00%

 

50.00%

 

1,237

 

03/11

 

$

400,000

 

450 West 33rd Street(10)

 

Normandy

 

50.00%

 

50.00%

 

1,622

 

04/11

 

$

28,824

 

 


 

(1)

 

Acquisition price represents the actual or implied purchase price for the joint venture.

(2)

 

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 property’s ownership, with an option to convert the loan to an equity interest, which was exercised in December 2008. Certain existing members had the right to re-acquire approximately 4% of the property’s equity. These interests were re-acquired in December 2008 and reduced our interest to 42.95%

(3)

 

We, along with Onyx, acquired the remaining 50% interest on a pro-rata basis in September 2009.

(4)

 

The property is subject to a 13-year triple-net lease arrangement with a single tenant. The lease commenced in 2007.

(5)

 

The deconsolidation of these joint ventures in 2010 resulted in an adjustment to retained earnings of approximately $3.0 million and to the noncontrolling interests in other partnerships of approximately $9.5 million.

(6)

 

In December 2010, the Company’s 180-182 Broadway joint venture with Jeff Sutton announced an agreement with Pace University to convey a long-term ground lease condominium interest to Pace University for 20 floors of student housing. The joint venture also admitted Harel, which contributed $28.1 million to the joint venture, for a 49 percent partnership interest.

(7)

 

In December 2010, the Company’s $12.0 million first mortgage collateralized by 11 West 34th Street was repaid at par, resulting in the Company’s recognition of additional income of approximately $1.1 million. Simultaneous with the repayment, the joint venture was recapitalized with the Company having a 30 percent interest. The property is subject to a long-term net lease arrangement.

(8)

 

We issued 306,296 operating partnership units in connection with this investment. We have committed to fund an additional $47.5 million to the joint venture. This liability is recorded in accrued interest payable and other liabilities. In addition, we made a $125.0 million bridge loan to this joint venture which was bearing interest at a rate of 7.5%. This loan was repaid when the joint venture refinanced its debt in April 2011.

(9)

 

In March 2011, we contributed our debt investment with a carrying value of $286.6 million to a newly formed joint venture in which we hold a 50% interest. We realized $38.7 million of additional income upon the contribution. This income is included in preferred equity and investment income. The joint venture paid us approximately $111.3 million and also assumed $30 million of related floating rate financing which matures in June 2016. See Note 5. In May 2011, this joint venture took control of the underlying property as part of a recapitalization transaction which valued the investment at approximately $1.1 billion. We hold an effective 49.5% ownership interest in the underlying investment.

(10)

 

This joint venture holds an investment in a debt position.

 

20



Table of Contents

 

SL Green Realty Corp.

Notes to Consolidated Financial Statements

June 30, 2011

(Unaudited)

 

We generally finance our joint ventures with non-recourse debt.  However, in certain cases we have provided guarantees or master leased tenant space.  These guarantees and master leases terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.  The first mortgage notes and other loan payable collateralized by the respective joint venture properties and assignment of leases at June 30, 2011 and December 31, 2010, respectively, are as follows (in thousands):

 

Property

 

Maturity
Date

 

Interest
Rate
(1)

 

 

June 30,
2011

 

 

December
31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

100 Park Avenue(2)

 

09/2014

 

6.64

%

$

213,813

 

$

204,946

 

21 West 34th Street

 

12/2016

 

5.76

%

 

100,000

 

 

100,000

 

800 Third Avenue

 

08/2017

 

6.00

%

 

20,910

 

 

20,910

 

One Court Square

 

09/2015

 

4.91

%

 

315,000

 

 

315,000

 

1604-1610 Broadway(3)

 

04/2012

 

5.66

%

 

27,000

 

 

27,000

 

388 and 390 Greenwich Street(4)

 

12/2017

 

5.19

%

 

1,106,758

 

 

1,106,758

 

1745 Broadway

 

01/2017

 

5.68

%

 

340,000

 

 

340,000

 

141 Fifth Avenue

 

06/2017

 

5.70

%

 

25,000

 

 

25,000

 

1 and 2 Jericho Plaza

 

05/2017

 

5.65

%

 

163,750

 

 

163,750

 

11 West 34th Street

 

01/2016

 

4.87

%

 

17,891

 

 

18,000

 

1551-1555 Broadway(7)

 

07/2021

 

5.10

%

 

180,000

 

 

---

 

280 Park Avenue

 

06/2016

 

6.55

%

 

710,000

 

 

---

 

Total fixed rate debt

 

 

 

 

 

$

3,220,122

 

$

2,321,364

 

1515 Broadway(5)

 

---

 

---

 

 

---

 

 

462,896

 

The Meadows(6)

 

09/2012

 

1.56

%

 

85,871

 

 

87,034

 

388 and 390 Greenwich Street(4)

 

12/2017

 

1.36