SL Green's Space Is Leased. 5.6 Points of It Is Not Paying Yet

SL Green’s Manhattan office portfolio was 94.8 percent leased on June 30. It was 89.2 percent economically occupied. The 5.6 point difference across 23,971,485 sq ft is space that is signed and not yet paying, and it is the clearest measure available of what the Manhattan leasing recovery is actually costing the landlord.

Why it matters

Brokers quote leased occupancy because it is the number that closes deals, and it is rising: Manhattan same store office occupancy including leases signed but not commenced reached 94.7 percent, up from 94.4 percent at March 31 and 93.0 percent at the end of 2025, against a stated year end target of 95.0 percent. None of that is wrong. But a tenant inside a free rent period is counted in the leased figure and absent from the economic one, so the spread between the two is a direct read on concessions. For anyone underwriting a Manhattan office building, or negotiating a lease in one, that spread is the leverage that still exists in the market even as the headline occupancy tightens.

The numbers

The concession detail sits in the earnings release. Replacement leases signed in the second quarter averaged a starting rent of $98.42 per sq ft, 18.0 percent above the prior rent on the same space, on 5.8 year terms with 4.5 months of free rent and $58.77 per sq ft of tenant improvement allowance. Across six months the picture is heavier: 66 replacement leases on 975,470 sq ft at $109.59 per sq ft, 16.6 percent above prior rents, but on 8.5 year terms with 8.8 months of free rent and $91.89 per sq ft of improvements.

The building level numbers show where the gap concentrates. One Vanderbilt Avenue, 1,657,198 sq ft and 39 tenants, is 100 percent leased, occupied and economic, and contributes 11.9 percent of annualized office cash rent. At 245 Park Avenue, 1,782,793 sq ft and 13 tenants, leased occupancy held at 97.8 percent while economic occupancy slipped from 86.5 percent to 85.5 percent, a 12.3 point gap and 7.2 percent of cash rent.

Volume itself is not the problem: 53 Manhattan office leases on 445,161 sq ft closed in the quarter, 104 leases on 1,374,425 sq ft across six months, and the company raised full year funds from operations guidance to $5.60 to $5.90 per share.

What’s next

Watch whether 245 Park’s economic occupancy turns up in the third quarter as free rent burns off. See our coverage of SL Green’s SoHo sale and the New York market.