What CEOs Are Saying: A Mixed Real Estate Market

Insights from last week's earning calls: SL Green Realty, Rexford Industrial Realty, and First Industrial Realty Trust

This week we’re looking at three earnings calls from commercial real estate companies operating in very different markets: Manhattan’s offices, SoCal warehouses, and logistics facilities nationwide.

The calls reveal how dramatically post-pandemic real estate trends are diverging by property type and location. Manhattan office, written off as dead just two years ago, is experiencing a recovery, driven in part by booming AI companies. But industrial real estate, which overbuilt during the COVID logistics boom, is now dealing with the hangover.

Here’s what three real estate CEOs are saying:

SL Green Realty Corp. (SLG)

Q3 2025 Earnings Call

SL Green is Manhattan’s largest office landlord, with about 30 million square feet of office space concentrated along Park Avenue and in Midtown. Its portfolio includes buildings like One Vanderbilt, the mega tower next to Grand Central Terminal.

Overall, this was a confident, forward-looking call. The company beat earnings expectations and management spent most of the time talking about aggressive expansion plans and rising rents across the portfolio. The big takeaways:

Manhattan real estate is back

After years of concerns about office real estate, Manhattan is experiencing a genuine rebound. CEO Marc Holliday opened the call by citing a recent Wall Street Journal article saying “the New York office market is roaring back,” and the numbers support that claim.

SL Green CEO Marc Holliday

SL Green signed nearly 2 million square feet of leases so far this year, occupancy is climbing above 92%, and the company expects to hit 93.2% by year end. Manhattan office leasing volume in the first three quarters of 2025 rose about 30% to 30.05 million square feet, the strongest year-to-date period since 2002.

AI companies and tech firms are driving much of that activity. For example, one of the company’s leases this quarter was with a 92,000 square foot AI firm. Financial services companies are also expanding. But the broader story is about supply constraints. Office-to-residential conversions are removing inventory, there’s minimal new construction planned, and tenant demand keeps growing. In some buildings across the portfolio, rents have increased 10-20% in just the past ten months.

The rents are too damn high?

The company is making aggressive moves to capitalize on this new environment. SL Green just announced the acquisition of Park Avenue Tower from Blackstone for $730 million. This is a straightforward rental appreciation play. The building is 95% leased but at below-market rents, and the vacancy rate in the Park Avenue corridor has dropped below 6%. Holliday expects rents in this market segment could rise 20-25% over the next four to five years.

SL Green is also buying a development site at 346 Madison Avenue for $160 million to build a new boutique office tower targeting rents over $200 per square foot, with delivery around 2030. By the time the company delivers, it expects the only competing projects will already be leased up.

Plan B for the Times Square casino

The big disappointment this quarter for SL Green was the company’s failed casino bid for Times Square. The company put significant effort into a proposal for Caesars Palace Times Square at 1515 Broadway but didn’t advance in the state licensing process. Holliday was clearly frustrated with how the process played out but noted the building remains fully leased through mid-2031 with strong cash flow. The company is now exploring converting it to entertainment and hospitality uses.

The underlying dynamic across the portfolio is scarcity creating pricing power. There are currently 72 tenants in the market looking for 100,000+ square feet each, and very little supply is coming to meet that demand. For a landlord with premium buildings in core locations, that sets up well for the next several years.