After years of steady dividends, SL Green Realty Corp. may reduce its shareholder payouts in 2026 due to declining cash flow. Analysts say that the company’s expected dividend distributions are likely to exceed its adjusted funds from operations next year.
“Lower-than-expected (property) sales volumes in 2025 may elevate the risk of a dividend right-sizing,” Evercore ISI analyst Steve Sakwa wrote in a client note. He also described SL Green as a “net seller” for the upcoming year.
The company did not provide comment on these projections.
Since 2016, SL Green shareholders have received an annual payout of about $3 per share, even as other office landlords such as Vornado Realty Trust, Empire State Realty Trust, and BXP cut their own dividends. However, SL Green has faced several challenges recently. The firm’s stock has fallen by 30 percent so far this year and has underperformed compared to other office landlords. It also failed in its attempt to secure a casino license for Times Square.
SL Green aimed to sell $1 billion worth of properties this year but achieved less than half of that target, according to Sakwa.
Despite these setbacks, the company reports that its Manhattan office portfolio is currently 92 percent occupied, supported by leasing activity at the redeveloped One Madison Avenue.
In October, SL Green agreed to purchase Park Avenue Tower in the Plaza District for $730 million from Blackstone Group. This price represents a significant reduction from what Blackstone spent acquiring and renovating the building since 2014.
The firm is also under contract to acquire the former Brooks Brothers building on Madison Avenue with plans for new development. In addition, it made an unsuccessful bid for Paramount Group and has shown interest in buying the Chrysler Building.
— Holden Walter-Warner
