SL Green Realty Corp. has surpassed the initial target of $1 billion for its SLG Opportunistic Debt Fund, having received more than $500 million in new commitments this week alone. The vehicle is backed by a consortium of global institutional investors, including public pensions, insurance companies and high-net-worth platforms.
The fund launched in 2024, targeting distressed credit opportunities in New York’s office and retail real estate sectors. Canadian investor Caisse de Dépôt et Placement du Québec became the vehicle’s anchor at the end of the year.
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The SLG Opportunistic Debt Fund invests in new and existing loans, loan portfolios and controlling CMBS securities. It aims to deliver current income and capital growth through structured debt, with a strong focus on downside protection.
At the end of June, SL Green’s portfolio comprised ownership interests in 53 properties totaling 30.7 million square feet, most of it pertaining to office space. This included 27.2 million square feet in Manhattan holdings as well as 2.7 million square feet securing debt and preferred equity investments.
Manhattan’s office sector holds steady
Manhattan has one of the highest office occupancy rates in the U.S., according to a recent Yardi Matrix report. The metro’s vacancy rate as of May was 15.7 percent, down 50 basis points year-over-year. However, the borough also remained the nation’s most expensive office market, asking rents averaging $68.08 per square foot, despite a 4.5 percent annual decline.
In terms of office investment volume, Manhattan led nationally with almost $2.8 billion in sales year-to-date as of May, the report shows. Assets traded on average for $448 per square foot, more than double the $194 national figure.