SL Green to launch $1bn New York-focused office debt fund

The local investor has been a long-time debt investor alongside its equity portfolio.

New York-based SL Green Realty Corp said it would start raising capital this month for a $1 billion fund which will focus on debt investments in New York’s office market, the firm stated in its quarterly earnings report.

“We’ve been out speaking with folks domestically [and in the] Middle East and Asia,” Marc Holliday, SL Green’s chief executive officer, said in December at a conference, according to published reports. “We’re sizing it at about $1 billion, which is not to mean that’s the dimension of opportunity. That’s just where we want to peg the first fund.”

The move comes as Ares Management and RXR Realty have joined forces for a $500 million joint venture to acquire high-quality New York office properties that have struggled during a market downturn, and as veteran lenders Ethan Penner and Chad Carpenter are gearing up to launch a real estate investment trust that will make loans on similar properties nationally.

According to SL Green’s fourth quarter report, the firm is also increasing its 2024 earnings guidance range, with funds from operations, the measure of cash flow by a real estate investment trust, and net income both pegged to be higher than previous forecasts.