Thank you, everybody for joining us and welcome to the SL Green Realty Corp’s third quarter 2009 earnings results conference call. This conference call is being recorded. At this time, the company would like to remind the listeners that during the call, management may make forward-looking statements. Actual results may differ from predictions that management may make today. Additional information regarding the factors that could cause such differences appear in the MD&A section of the company’s Form 10-Q and the other reports filed with the Securities and Exchange Commission. Also during today’s conference call, the company may discuss non-GAAP financial measures as defined by the SEC Regulation G. The GAAP financial measures most difficulty compare to each non-GAAP financial measures discussed and reconciliation of the differences between non-GAAP financial measures and the comparable GAAP financial measures can be found at the company’s website at www.slgreen.com by selecting the press release regarding the company’s third quarter earnings. Before turning the call over to Marc Holliday, Chief Executive Officer of SL Green Realty Corp, we would like to ask those of you participating in the Q-and-A portion of the call today to please limit your questions to two per person. Thank you and go ahead, Mr. Holliday.

Thank you. Good afternoon everyone and thank you for calling in today. I am joined by Andrew Mathias, Greg Hughes, and others at SL Green and we will be discussing the quarter’s activities and take your questions. I thought we had a good quarter during the third quarter and one that shouldn’t have contained surprises for anyone. Core performance was solid, particularly in light of the current economic climate. All of the so called one timer and trends associated with this quarter have been surfaced and discussed some prior calls and from my vantage point, the quarter is very much inline with our expectations and management’s guidance. Some of the important highlights from the quarter include substantial NOI growth on a same store basis, positive mark-to-market on Manhattan leases, maintenance of our occupancy rate, reduction of our balance sheet indebtedness, extension of certain liabilities and obtaining control of 100 Church Street. However, the results also reflect the significant battering of the New York City economy and resulting impact on real estate fundamentals in our market. Availabilities in midtown during the third quarter inch up to a total of approximately 13% with 9% directly offered by landlords and 4% representing sublet availabilities. This is within the range of the 12% to 14% we have been forecasting. While the rate of increase is slowing dramatically and will hopefully soon cease, the high level of availability is obviously negatively impacting rental levels and specifically the sublet availabilities of course all New York City landlords to substantially wide in out concession packages in order to compete with fully built out space. The effects of this competition for tenants can be clearly seen by a low mark-to-market of 5% for the third quarter. However, this is right within the range of 0% to 10% we…

Thanks, Marc. Not surprisingly capital markets activity in the third quarter continued to be virtually non-existent versus prior year’s levels. The one notable exception in our portfolio was the announcement of our contract to sell certain interests in 485 Lexington to a partnership of Optibase and Gilmore, U.S.A. more on that later. Additionally, HSBC entered into a contract to sell their U.S. headquarters building located at 452 Fifth Avenue. In a positive sign for the market, this deal was struck with no financing in place and reportedly the purchaser intends to close the deal all cash at a price of $330 million, approximately $381 per square foot. The purchase price and the transaction is structured in such a way that HSBC committed to a short term one year lease-back on certain tower office space. The base of the Fifth Avenue building and the significantly older Class C building, with both of which are included in the overall transaction square footage, were leased back for a 10 year period by HSBC. Clearly, the buyers are anticipating firming demand for space will allow them to spend the necessary capital and lease up the property when HSBC leaves the tower. The property was bought by a foreign group, continuing the trend of foreign capital being the dominant buyers in the Manhattan market. The only other notable transaction in the market currently is UBS’s sale of a minority interest in 299 Park Avenue, which is a unique offering given Fisher Brothers’ managing position within the partnership. While this deal has yet to go to contract, we would not be surprised to see private, high net worth capital be a successful purchaser here as well, if Fisher Brothers elects not to exercise certain contractual rights they have in their partnership agreement and we expect the…

Great thanks, Andrew. We start out by taking a look at our balance sheet. The balance sheet at 9.30 actually reflects many of the benefits office our continued efforts to raise liquidity and deleverage the balance sheet. As of 9.30, we had approximately $780 million of cash, restricted cash and marketable securities. Note that during the quarter, we invested some of our cash in short term bonds in network to gain some additional yield. With a decent cash position and most of our short term debt maturities having been addressed, we decided to hold you off on the sale of any future structured finance investments. Accordingly, $59.7 million of structured finance investments, previously classified as held for sale have been reclassified to the structured finance balances. This, coupled with the $16.1 million of new originations during the quarter, accounted for most of the increase from the $534 million at 9.30 to the $615 million at 9.30. Note that the $615 million is substantially below the $725 million targeted balance we established during our investor conference last December. During the quarter we continued our deleveraging efforts with the repurchase of $33 million of our outstanding bonds and $48 million of our credit facility. Since the inception of this buyback program roughly a year ago, we have been able to repurchase $802 million of our debt for approximately $595 million and have been able to realize $162.9 million of gains on these repurchases. During the quarter, we successfully closed on the refinancing of our 100 Park Avenue project with a $215 million loan, which enabled us to recoup a portion of the $72 million used to renovate that project. This loan has a maturity date of 2014 and carries two one year extensions and has a fixed interest rate of approximately 6.7%.…

Okay. Why don’t we open it up for questions you now and at the end of the questions for those that stay on, I’ll have some just closing remarks concerning our December Investor Meeting that is coming up in just over a month’s time, but for now, we’ll take questions.

(Operator Instructions) Your first question comes from Ian Weissman - ISI Group.

The first question I guess is for Steve Durels if he’s on the line, Steve just talking about or looking at the pace of leasing this quarter, if you look at the deals that tenants are taking, how much of that is growth space? They’re taking advantage of obviously rents down in the marketplace 50%, so I’m trying to get a sense of utilization on leases and are tenants taking growth space given how far rents have dropped?

I don’t have a number for you, but I can tell you intuitively that a good deal of the transactions that we do where it’s a new tenant coming into the building, rather than just a renewal transaction, that a large number of those deals seem to have some component of growth. It’s modest, though. It’s generally 10% to 15% of the space. It’s rarely a driver of people’s decision as to why they’re moving. There are a couple of examples out in the marketplace like the CV Star deal, which is done on Park Avenue and some of the recent financial service deals that were done on Park Avenue that were driven by growth, but I think generally speaking, new deals have a growth component. It’s rare that it’s the driver, but the big news is that guys are really making decisions to take long term deals and they’re making decisions to actually relocate rather than just to renew in place.

Just one on that, the deals that you’re seeing or the strength in demand, is there a particular sector, is financial services driving it this time around?

No, the good news is that it seems to be pretty broad based. We’re seeing user groups from law firms who are doing consolidations, smaller financial service businesses that are actually out there expanding. We’ve had a couple small guys that have picked up 5,000, 10,000-foot and accounting firms seem to be active in the marketplace. We’ve had growth from healthcare, some from education. So it seems to be that it’s no one, not dominated by a particular industry but pretty broad based.

For this quarter, you broke out marketable securities and looks like there was a big pickup sequentially from the second quarter. What exactly was the cause of that?

That’s what I alluded to when I was talking about my cash, restricted cash and marketable securities, it was some short term bonds, they come due accounted within the next 12 months, just to get some additional yield on our cash balances.

Your next question comes from Jamie Feldman - Banc of America.

Another question on fundamentals, Marc, you had mentioned a good amount of sublease space in the market that is built out and ready to go and once that sort of dries up, that’s what really would turn market conditions. How much space would you say that is?

How much space over the 4% is highly competitive?

Correct.

I don’t have an exact number for you. I will have that when we meet in December, because we’re going to have to do a space by space inventory. I would estimate that to be at least half, but not three quarters. So within that range, I can’t be more specific, but I would say maybe half of that space is competitive, it’s not 10 years, it’s long enough, call it seven to 10 years. It’s got to be seven to 10 years, well located, got to have decent assignment sublet right in the lease. It’s got to be generally fully built out, not requiring much capital, or if not the deal gets tougher and I think half is probably a good proxy, maybe a little over, we’ll try to get more specific with you in a month.

Did you have something to add?

I’m sorry?

It sounded like Steve was going to say something.

You have something to add?

The only think thing that may help us some color of that is that 25% to 30% of the sublease space out there has a term of five years or less, which is a big handicap as far as it making that part of the inventory marketable, which from an owner’s perspective turns those kinds of spaces into opportunities that we convert on a pretty frequent basis.

Your next question comes from Josh Attie - Citi.

It’s Josh Attie with Michael. Can you talk about the upcoming refinancing of the mortgage on 1515 Broadway next year in terms of the level of debt you thing you can achieve, the level of amortization, you think might be necessary and if you think you might need to put equity into that property and how the lenders are thinking about it given that there’s a million square feet of lease expiring in 2015.

Yes, I think, Josh, we’re still pretty comfortable with the estimates we made for the sources and uses that we did at our equity offering in May and I think there we modeled $125 million amortization payment.

That would be our portion of it.

Our share and the new loan, I would say will likely have an amortization component because Viacom as you know is a 2015 expiration, but we’re working hard on addressing that situation and are still comfortable with the estimates we made.

Then just one more question on the line of credit buybacks. Are any of the other of the 30 lenders in your bank line do you think willing to sell their commitments back to you?

I think everybody has reached the conclusion that it’s obviously a money good credit at this point in the game. So I don’t know that we would expect a lot more activity. I think you’ve got to wait and see what happens here at year end. It’s certainly possible. You heard a lot of the banks talk about and foreshadowing additional marks going forward, whether this would be a position that they would mark is entirely possible. You may have people that may clean up their balance sheets and look for liquidity at year end. We’re not counting on it being a big number, but certainly a possibility.

Greg, how are you thinking about with sitting on the cash on your balance sheet and obviously a fully drawn line of credit and it sounds like from Marc’s comments things in the city and financial markets have gotten better. We sort of past, do you think the lines are going to be pulled that you just effectively pay back the line a little bit?

I think if you look for $9 billion companies to be carrying cash balances of $6 or $700 million in today’s environment, a large piece of that’s going to go towards, we have some convertible notes that come due in 2010, and so I think that the cash balance relative to the size of the company, some of the pending maturities and some of the other capital work that we have going on. I think is a pretty appropriate level as we sit right now.

So when you think about next year in terms of having to put $125 million into 1515 Broadway and some other cash needs, that effectively is going to take a lot of the free cash flow that you’re generating, where do you sort of get in terms of having the capital if the line’s fully drawn, and you want to keep that level of cash, where is the other capital going to come from?

I would say a couple things. The sum of the things you mentioned would still leave us with a pretty ample cash position, even net of 1515 pay down and net of the bond retirement. We could still be in a position of north of $500 million, so I guess it’s all relative as to whether you call that a lot or a little, but I think north of $500 million balance in my book is still a decent chunk of change and because of the dividend policy we’ve adopted, we’ll be increasing those balances organically through cash flow. We also have the ability to receive repayments and/or pay downs of structured finance positions, and/or we could sell those positions as we’ve done in the past and we’ve shown I think demonstrated an ability to raise money pretty readily, even in very bad markets, through that structured finance portfolio by monetizing through note sales. So all-in-all, whether we do it through refinancings as we’ve just completed, upsized refinancings in three out of four projects that are contained in today’s release or otherwise, I think excess to capital, given our cash position and the things we have available to us going forward, I feel like we’re in a pretty decent position.

We said remember, we have a cash balance that we’re expected to use those money’s to retire the corporate obligations, so the 2010 converts and 2011 notes that come due, it’s a very different environment than just from the last quarter call, the unsecured debt markets are very, very much opened at this point in time and so you could see those corporate obligations being refinanced because there’s heavy demand now as you’ve seen from a bunch of our accessing the unsecured market.

Your next question comes from [Ross Salisbury] - UBS.

Marc, I thought I heard in your commentary that you thought potentially the balance of power could come back to landlords by 2012 if we saw 30,000 new jobs created in 2010 and 2011. What should we infer from that comment in terms of your view on net effective rental rates in Manhattan over the next 12 months to 24 months?

I think it’s going to be a two step. The first part, which is obviously nearer term, is going to be absorption within 2010 of what I’m calling the prime or primer sublet space which will have to get a better answer to you on exactly how much but I estimated earlier, about 4 million to 5 million square feet and as that occurs, I think you’ll see a tightening of the net effectives through a tightening of the concession packages, trim down the free rent, trim down the work letters. It won’t be the peak levels they are now, nor will it be the trough levels they were when we had a 5%, 6% vacancy rate in Manhattan, but it will be back to let’s say a market equilibrium for the moment and then the second shoe, which I think will start to increase nominal rental rates, will be job growth. It’s anyone’s prediction as to whether that will or won’t occur in 2010, but I think the fact that we’ve been through such a draconian period, if you will in the various business sectors in the country and certainly in New York and yet the job base the service, the office service job base in Manhattan was hit, but not hit so much more catastrophically so than what we experienced in ‘01, ‘02, ‘03, or the early 90s, that I think it will be resilient, we will get job growth again as financial service firms drive business in and around our city. All the other business sectors that have reported to us that their businesses are picking up in terms of ad revenues and such, and that will I think start to drive nominal rental growth. So I think we’re hoping in 2010 to see concession packages trimming and then I guess you could see rental growth and I think before ‘12, I don’t know why you couldn’t start to see that in ‘11, because you don’t have to be at equilibrium in order to drive that, you just have to be trending there and when tenants see you trending there. I think they’ll be called into action to do something in what they will perceive to be a rising rental environment. So we need competition for space and I think competition for space will result when we start to see job growth again.

What impact if any do you think is going to have on rental rates from the Worldwide Plazas and the 452 avenues trading at 400 or sub 400 a foot levels to the extent where you’ve got new owners with low cost basis who can undercut the current market rents? If we fee banks taking assets back in the hand of new owners, is that an increasing pressure that has some offsetting factor?

I think the pressure is supply and demand, primarily, its a lot of what you’ve seen I think is priced into those deals.

Those deals are trading with the expectation of leasing at current market rents, not below current market rents and in some cases with growth off of current market rents.

So I don’t think you’re going to see further pressure. I think it’s more of an inventory issue, whether it’s in the hands of the borrower or a lender if it’s available and I would say once the deal trades and there’s new money in the deal, they’re going to try and maximize those returns. They’re not just going to be cutting and running to put low rents in, certainly not lower than today. So, I think the only thing that would cause rents to go lower would be accelerating job losses in the private office sector, not necessarily or not at all the trading of properties to lenders. I don’t think that’s going to be a factor. The lenders are going to put it out. The brokers going to work the market and they’re going to get market rents.

Your next question comes from Jay Habermann - Goldman Sachs.

Here with Sloan as well. I guess, Greg back to the line of credit, could you give us a sense of what your target would be for the end of next year? I mean, you mentioned the $800 million of delevering so far, but is that a realistic target for the next 12 months or so. I know you’ve deferred some of your asset sales, but why not take advantage of liquidity in today’s market?

We’re borrowing at LIBOR plus 80, right, so we’re borrowing at around 1% and I think if you look at the projections that we’ve laid out for people, we’re targeting getting to in 2012, that the line would be paid down to kind of $900 million to $1 billion. Obviously, we’re going to look to retire the most expensive debt first.

Separately, you mentioned your trip to Asia. Can you give us give us a sense of what sort of cap rates foreign buyers are interested in New York?

Obviously, totally depends on the opportunity and sort of the flavor of the opportunity whether it’s a vacant lease subplay, whether it’s a core property that’s stabilized and whether the rents in the building are at or above or below market, but I would say generally we feel very comfortable around a 6% to 6.5% cap rate. There are many, many groups that expressed a great desire to find core midtown properties around that level.

Just to be clear, are you still expecting positive lease spreads even until the market bottoms as you sort of forecast mid-next year?

I’m going to stick to my range to the end of the year, 0 to 10, 0, I’m not sure, my math is, I think it’s positive. I think that something in and around that range is where we will expect to end the year. In December, we’re going to roll up all our budgets which we’re working feverishly on in October. We go through them, tenant by tenant in November and first week in December we’ll have a you view as to where we’re going to be in 2010. It really just depends on what’s coming due in ‘10, so we really just have to look. You could have, if there’s a lot of low rate rents coming due, we’ll still have sizable mark-to-market. If there’s some high rate deals from the year 2000, it might be modest, but we don’t have that number for you now. We will in a month, but I do certainly stand by that for Q4.

Your next question comes from John Guinee - Stifel Nicolaus.

Couple of quick questions on just sources and uses, Park, I think you quoted about $56 in tenant improvement costs. What’s the associated leasing commissions’ on the most recent deals? Should we figure $10, $15 a square foot?

In New York, it’s really arithmetic. The good news is it hasn’t gapped out, because of the market, but it filled it. It decreases as the rent decreases and the per foot is just a translation of whether we’re doing a $40, $50, $60 or $70 deal. So Steve, can you ballpark it?

32%.

32% of first year’s rent is sort of a ballpark.

So, $50 rents, 15 bucks in leasing commissions.

That’s on new deals, John has.

Renewals?

Renewals will be less.

Then of the structured finance income, how much of that is pure cash actually being generated by the properties? How much of it is accrual? How much of it is coming from some sort of reserve account?

When you say it, which it are you referring to?

You’ve got $600 million, $610 million of structured finance assets generate I think $16 million last quarter and income weighted average yield, somewhere in the nine, but that’s not all cash generated from these particular structured finance loans. A lot of that is in a reserve account when you originally setup the deal or it’s on a pay accrue. So how much of that is actually hard cash that the properties are generating?

Let me break it down to two levels. There’s a question about how much of the interest is being serviced by cash. I’m going to leave that to Greg and/or Matt, if we have that statistic, but the statistic I quoted earlier on that New York portfolio, 6.5 debt yield overall, NOI debt yield or 7%, when pulling out one property, those are cash NOI yields.

The income recognition, you should assume that 60% to 70% of the structured finance is a cash number.

So 30% is either a reserve or an accrual?

That maybe in terms of interest recognition, but in terms of hard cash divided by outstanding debt balance on Manhattan office, that’s 6.5% to 7% yield. If I would coincides, because 10% is the rough average yield and that’s the 25% to 30% since at all sort of time to get…

Of your $500 million of sort of cash after all the expected pay downs, etc., how much would you expect to use to unwind some of the structured finance deals, pay down the debt senior to you?

In an example like 100 Church, how much would we expect? There, it’s a lease up situation. We expect that the equity that goes into the property will be for lease up and not for debt pay down.

There’s also a significant reserve at the first mortgage level at 100 Church, which we expect to be able to access to defray those lease up costs.

It would be on a case by case basis, but I would say generally if we’re going to come into a situation, take it over, put our resources behind it, and we’re putting cash in that’s going to be something that’s accretive to the property to make it more valuable.

If you think about it in terms of our liquidity, we would say at this point in time it’s not a meaningful number. We would put it based upon what we think we might take back between now and next year, would be with any $50 million or less.

We have certain situations, John, where we’ll the mezz will be in restructuring discussions and the first mortgage may still be performing based on the asset level performance. So there, you could potentially because of inter credit agreements, which are preexisting. You could potentially foreclose the equity and assume the first mortgage as it sits with remaining terms.

Your final question comes from Jordan Sadler - KeyBanc.

Just given your comments on capital being on the sidelines, sounds like you’re in the camp that opportunities down the road from either debt default or the wave of maturities maybe limited. So I’m just curious, if that’s correct and if it is, your view, where would you expect to see opportunities?

I think we believe that the opportunity pipeline is going to open up, which I mentioned in my comments. We see banks beginning to take marks on their assets again and we see special services beginning to start to move loan situations, in other words, sell our whole loans, and resolve other situations and that we think will be the beginning of a transactional pipeline opening up. So we’re very hopeful than in 2010, you’ll see a more transaction in rich environment, where we may be able to find some opportunities.

So this is a follow-up, given that much of your capital sounds like it’s earmarked for debt reduction through 2012 or so, how do you expect to capitalize on the opportunities you might see and does Asia factor into that, your tour through Asia.

John, In part of that, I had addressed earlier in terms of, I still see that we have substantial cash balances. We’re going to have more cash coming via the non-dividend payment. We have opportunities to either finance real estate or as Greg added, possibly pass the unsecured markets. We have the whole potential of monetizing structured finance and/or doing these deals in a JV format in some cases, which in part was reflective of the efforts in Asia. So, I think we’re very resourceful I think in that regard and we grew very substantially when we were just a company at inception 12 years ago and we never found access to capital to be an inhibitor to growth. We’re starting from a much better spot today for this next cycle of opportunity, with cash and balance sheet so I’m confident we’ll be able to capitalize the deals. To me, the hard part is always if you find a good deal in midtown Manhattan core real estate, we will find and/or have the capital resources available to do it.

For Steve, maybe just the curious about the lease buyouts during the quarter. You may have mentioned it. I didn’t hear. What was the sort of source and timing? Who’s doing sort of lease terminations these days?

Well, the one that really drove the number was Pfizer bought out of their lease at 220 for its 2 street where they had 40,000 square feet and they paid us $0.94 on the dollar of the remaining obligation which had roughly seven years left on the term. So, obviously in that kind of situation, that’s a great opportunity. We now have almost all of our money and can take the space back to the market and gives we rent it at substantially discounted number we’re way ahead of the game.

So, lease buyouts expected sort to slow down?

We haven’t done that many buyouts where it wasn’t backed up with a replacement tenant simultaneously. In this case the number was so compelling that we took advantage of it but almost every deal that we do a buyout other than that’s where it’s an elective on our part is a coordinated transaction with a replacement tenant.

Operator, we’re done with questions.

Yes, we’re done with questions.

Okay. Thank you everyone for calling in today and listening throughout. I just in closing, Heidi Gillette is going to give you some details on what we’re doing this year for our investor meeting and how to coordinate so that you can attend if you choose to. So Heidi.

Yes, good afternoon all. As I indicated in the press release from last night, our investor conference this year will be December 7, which is a Monday. We will be serving lunch at 12 pm and there will be a presentation at 1 pm by management. To find out if you’re eligible to attend, please send your contact information to slg.2009@slgreen.com. Again, that’s slg.2009@slgreen.com. Thanks.

Thank you everyone.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a great day.