SL Green Earnings: Manhattan Office Portfolio Holding Up Well, but Shares Are Overvalued

No-moat-rated SL Green Realty reported decent numbers in the second quarter as the Manhattan office portfolio holds up relatively well. Nonrecurring gains on discounted debt extinguishment lifted the headline numbers during the quarter. Given its high quality, the companys Manhattan office market portfolio is performing much better than the market. Still, we want to emphasize that the sector is not out of the woods yet. The company reported funds from operations of $2.05 per share, up 43% compared with the $1.43 per share in FFO during the second quarter of 2023. The headline FFO number included $48.5 million, or $0.69 per share, of gains on discounted debt extinguishments. Excluding the impact of nonrecurring gains, the companys core results were largely in line with our expectations.