Use these links to rapidly review the document TABLE OF CONTENTS ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PART IV

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
For the fiscal year ended December 31, 2012
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

Commission File Number: 33-167793-02

SL GREEN OPERATING PARTNERSHIP, L.P.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		13-3960938 (I.R.S. Employer Identification No.)

420 Lexington Avenue, New York, NY 10170
(Address of principal executive offices—Zip Code)

(212) 594-2700
(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ýo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý

As of February 2815, ~~2012~~2013, ~~910~~1,~~546~~103,267 common units of limited partnership interest of the Registrant were held by non-affiliates of the Registrant. There is no established trading market for such units.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement of SL Green Realty Corp., the parent of the Registrant, for its ~~2012~~2013 Annual Meeting of Stockholders to be filed within 120 days after the end of the Registrant's fiscal year are incorporated by reference into Part III of this Annual Report on Form 10-K.

SLTable ~~Green~~of ~~Operating~~Contents ~~Partnership, L.P. FORM 10-K TABLE OF CONTENTS~~

SL ~~10-K~~Green ~~PART~~Operating ~~AND ITEM NO~~Partnership, L.P. FORM 10-K

PART I
1.	Business	3
1.A	Risk Factors	11
1.B	Unresolved Staff Comments	24
2.	Properties	25
3.	Legal Proceedings	34
4.	Mine Safety Disclosure	34
PART II
5.	Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities	35
6.	Selected Financial Data	37
7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	40
7A.	Quantitative and Qualitative Disclosures about Market Risk	69
8.	Financial Statements and Supplementary Data	71
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	169
9A.	Controls and Procedures	169
9B.	Other Information	170
PART III
10.	Directors, Executive Officers and Corporate Governance	170
11.	Executive Compensation	170
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	170
13.	Certain Relationships and Related Transactions, and Director Independence	170
14.	Principal Accounting Fees and Services	170
PART IV
15.	Exhibits, Financial Statements and Schedules	171

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10-K PART AND ITEM NO.
PART I
1.	Business	3
1.A	Risk Factors	11
1.B	Unresolved Staff Comments	23
2.	Properties	24
3.	Legal Proceedings	34
4.	Mine Safety Disclosures	34
PART II
5.	Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities	35
6.	Selected Financial Data	37
7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	39
7A.	Quantitative and Qualitative Disclosures about Market Risk	68
8.	Financial Statements and Supplementary Data	70
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	152
9A.	Controls and Procedures	152
9B.	Other Information	153
PART III
10.	Directors, Executive Officers and Corporate Governance	154
11.	Executive Compensation	154
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	154
13.	Certain Relationships and Related Transactions, and Director Independence	154
14.	Principal Accounting Fees and Services	154
PART IV
15.	Exhibits, Financial Statements and Schedules	155

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PART I

ITEM 1. BUSINESS

General

SL Green Realty Corp., ~~also~~which is referred to as the Company or SL Green, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as well as a 95% of the economic, ~~non-voting~~ interest in the management, leasing and construction companies ~~affiliated with S.L. Green Properties. We refer to these management~~, ~~leasing and construction entities,~~ which ~~are~~is ~~owned~~referred byto SLas ~~Green~~the ~~Management~~Service ~~Corp~~Corporation, asa ~~the~~consolidated ~~"Service~~variable ~~Corporation~~interest entity." All of the management, leasing and construction services with respect to the properties which are wholly-owned by us are conducted through SL Green Management LLC which is 100% owned by us. The Company has qualified, and expects to qualify in the current fiscal year, as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to stockholders, is permitted to ~~reduce~~minimize ~~or avoid~~ the payment of Federal income taxes at the corporate level. Unless the context requires otherwise, all references to "we," "our" and "us" means SLGOP and all entities owned or controlled by SLGOP.

Substantially all of SL Green's assets are held by, and its operations are conducted through, the Operating Partnership. The Company is the sole managing general partner of the Operating Partnership. As of December 31, ~~2011~~2012, noncontrolling investors held, in the aggregate, a 32.1294% ~~common~~ limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership. See Note 12, "Capital."

Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P., or ROP, are wholly-owned subsidiaries of the Operating Partnership.

As of December 31, ~~2011~~2012, we owned the following interests in commercial office properties in the New York Metropolitan area, primarily in midtown Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, ~~Queens,~~ Long Island, Westchester County, Connecticut and Northern New Jersey, which are collectively known as the Suburban assets:

Location	Ownership
Manhattan	Consolidated properties	2627	18,~~429~~347,945	9293.8	%
	Unconsolidated properties	79	65,~~191~~934,~~673~~434	9195.60	%
Suburban	Consolidated properties	25	3,863,000	8079.59	%
	Unconsolidated properties	65	21,~~941~~539,700	9384.87	%
		64	31,426,318	91.2	%
		66	29,685,079	91.7	%

(1): The weighted average occupancy represents the total leased square feet divided by total available rentable square feet.

As of December 31, ~~2011~~2012, our Manhattan office properties were comprised of 2721 fee owned properties, including ownership in commercial condominium units, and six leasehold owned properties. As of December 31, ~~2011~~2012, our Suburban office properties were comprised of 3024 fee owned properties and one leasehold property. WeAs ~~refer~~of toDecember 31, 2012, we also held fee owned ~~our~~interests ~~Manhattan~~in ~~and~~nine ~~Suburban~~unconsolidated Manhattan office properties ~~collectively~~and asfive ~~our~~unconsolidated ~~Portfolio~~Suburban office properties. We

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refer ~~PART~~to Iour consolidated and unconsolidated Manhattan and Suburban office properties collectively as our Portfolio.

As of ~~ITEM~~December 31, 2012, we also owned investments in 15 stand-alone retail properties encompassing approximately 473,764 square feet, 16 development properties encompassing approximately 2,617,491 square feet, two residential properties encompassing 385 units (approximately 430,482 square feet), two land interests and 31 west coast office properties encompassing approximately 4,473,603 square feet. In addition, we manage two office properties owned by third parties and affiliated companies encompassing approximately 626,415 rentable square feet. As of December 31, 2012, we also held debt and preferred equity investments with a book value of $1. ~~BUSINESS~~4 billion.

WeOur ~~also~~corporate ~~owned~~offices ~~investments~~are located in ~~nine~~midtown ~~stand-alone~~Manhattan ~~retail~~at ~~properties~~420 ~~encompassing~~Lexington ~~approximately~~Avenue, ~~349~~New York,~~282~~ ~~square~~New ~~feet~~York 10170. As of December 31, ~~seven~~2012, ~~development~~our ~~properties~~corporate ~~encompassing~~staff consisted of approximately 273 1persons,~~395,838~~ ~~square~~including 170 professionals experienced in all aspects of commercial real estate. We can be contacted at (212) 594-2700. SL Green maintains a website at www.slgreen.com. On this ~~feet~~website, ~~and~~you ~~three~~can ~~land~~obtain, ~~interests~~free asof charge, a copy of ~~December~~our annual reports on Form 3110-K, ~~2011.~~quarterly Inreports ~~addition~~on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we ~~manage~~file ~~three~~such ~~office~~material ~~properties~~electronically ~~owned~~with, byor ~~third~~furnish ~~parties~~it to, the Securities and ~~affiliated~~Exchange ~~companies~~Commission, ~~encompassing~~or ~~approximately~~the SEC. SL Green has also made 0available on its website its audit committee charter, compensation committee charter, nominating and corporate governance committee charter, code of business conduct and ethics and corporate governance principles.9 We do not intend for information contained in SL Green's website to be part of this annual report on Form ~~million~~10-K. ~~rentable~~You ~~square~~can ~~feet~~also read and copy any materials we and SL Green file with the SEC at its Public Reference Room at 100 F Street, NE, Washington, DC 20549 (1-800-SEC-0330). The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our corporate offices are located in midtown Manhattan at 420 Lexington Avenue, New York, New York 10170. As of December 31, 2011, our corporate staff consisted of approximately 263 persons, including 163 professionals experienced in all aspects of commercial real estate. We can be contacted at (212) 594-2700. SL Green maintains a website at www.slgreen.com. On this website, you can obtain, free of charge, a copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as practicable after we file such material electronically with, or furnish it to, the Securities and Exchange Commission, or the SEC. SL Green has also made available on its website its audit committee charter, compensation committee charter, nominating and corporate governance committee charter, code of business conduct and ethics and corporate governance principles. We do not intend for information contained in SL Green's website to be part of this annual report on Form 10-K. You can also read and copy any materials we and SL Green file with the SEC at its Public Reference Room at 100 F Street, NE, Washington, DC 20549 (1-800-SEC-0330). The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Business and Growth Strategies

SL Green Realty Corp., New York City's largest ~~office~~commercial landlord, is the only fully integrated REIT that is focused primarily on acquiring, managing and maximizing the value of Manhattan commercial properties.

Our primary business objective is to maximize the total return to stockholders, through growth in funds from operations and through asset value appreciation. Our core business is the ownership of high quality office buildings that are strategically located in close proximity to midtown Manhattan's primary commuter stations. The commercial real estate expertise resulting from owning, operating, investing and lending in Manhattan for over 3132 years, has also enabled us to invest in a collection of premier retail properties, selected multifamily residential assets, and high quality debt and preferred equity investments. We also own high quality office properties in the surrounding markets of Brooklyn, ~~Queens,~~ Long Island, Westchester County, Connecticut and Northern New Jersey.

We are led by a strong, experienced management team that provides a foundation of skills in all aspects of property ownership and management including investment, leasing, operations, capital improvements, financing, repositioning and maintenance. It is with this team that we have achieved a market leading position in our targeted submarkets.

We seek to enhance the value of our company by executing strategies that include the following:

•: Leasing and property management capitalizing on our extensive presence and knowledge of the marketplaces in which we operate.
•: Acquiring office, retail and residential properties and selectively using joint venture capital to enhance returns and reduce investment risk.

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•: Investing in high-yielding debt and preferred equity positions, generating strong risk-adjusted returns, increasing breadth of market insight, building key market relationships and sourcing potential future property acquisition opportunities.
•: Executing dispositions through sales or joint ventures that harvest equity generated through management's value enhancing activities, thereby providing a continuing source of capital for reinvestment.

PART I

ITEM 1. BUSINESS

Leasing and Property Management

We seek to capitalize on our management's extensive knowledge of the Manhattan and suburban markets and the needs of our tenants through proactive leasing and management programs, which include: (i) use of in-depth market experience resulting from managing and leasing 3132.48 million square feet of ~~office~~ office and retail space, predominantly in Manhattan; (ii) careful management to ensure adequate average ~~lengths~~lease ofterm ~~leases~~ and manageable lease rollovers; (iii) utilization of an extensive network of third-party brokers; (iv) use of comprehensive building management analysis and planning; and (v) commitment to tenant satisfaction by providing high quality tenant services at attractive rental rates.

It is our belief that our proactive leasing efforts have directly contributed to our average portfolio occupancy consistently exceeding the market average.

Property Acquisitions

We acquire core properties for long-term appreciation and earnings growth. We also acquire non-core properties that are typically held for shorter periods during which we attempt to create significant increases in value. This strategy has resulted in capital gains that increase our investment capital base. In implementing this strategy, we continually evaluate potential acquisition opportunities. These acquisitions may come from new properties as well as properties in which we already hold a joint venture interest or from our debt and preferred equity investments. Although we continuously review our acquisition pipeline, there is not a specific metric that we apply to acquisitions that are under consideration.

Through intimate knowledge of our markets and operating base we have developed a keen ability to source transactions with superior risk-adjusted returns by capturing off-market opportunities that lead to acquisitions at meaningful discounts to replacement costs. In rising markets, we acquire strategic vacancies that provide the opportunity to take advantage of our exceptional leasing capability to increase cash flow and property value. In stable or falling markets, we target assets featuring credit tenancies with fully escalated in-place rents to provide cash flow stability near-term and the opportunity for increases over time.

In acquiring core and non-core properties, directly or through joint ventures with a predominance of high quality institutional investors, we believe that we have the following advantages over many of our competitors: (i) senior management's average 2526 years of experience leading a full-service, fully-integrated real estate company focused on the Manhattan office market; (ii) the ability to offer tax-advantaged structures to sellers through the exchange of ownership interests as opposed to solely cash transactions; and (iii) the ability to close transactions quickly despite complicated ownership structures.

Property Repositioning

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be ~~PART~~appealing Ito tenants when fully exploited. Our strategic investment in these buildings, combined with our active management and pro-active leasing, provide the opportunity to creatively meet market needs and generate favorable returns.

ITEM 1. BUSINESS

Property Repositioning

Our knowledge of the leasing markets and our ability to efficiently plan and execute capital projects provide the expertise to enhance returns by repositioning properties that are underperforming. Many of the retail and commercial office buildings we own or seek to acquire feature unique architectural design elements, including large floor plates, unique amenities and characteristics that can be appealing to tenants when fully exploited. Our strategic investment in these buildings, combined with our active management and pro-active leasing, provide the opportunity to creatively meet market needs and generate favorable returns.

Debt and Preferred Equity Investments

We ~~seek~~invest ~~high~~in well-~~yield~~collateralized debt and preferred equity investments that generate attractive yields. See Note 5—, "Debt and Preferred Equity Investments," in the accompanying consolidated financial statements. Knowledge of our markets and our leasing and asset management expertise provide underwriting capabilities that enable a highly educated assessment of risk and return. The benefits of this investment program, which has a carefully managed aggregate size generally not to exceed 10% of our total enterprise value, include the following:

•: Our typical investments generally provide high current returns and, in certain cases, the potential for future capital gains.
•: In certain cases, these investments may also serve as a potential source of real estate acquisitions for us. This is particularly true when a property's current ownership seeks an efficient off-market transaction, because ownership knows that we have already gained knowledge of the asset through the existing investment, and that we can close quickly if we believe such acquisition would be beneficial.
•: These investments are concentrated in Manhattan, which helps us gain market insight and awareness of upcoming and active investment opportunities and support for key relationships that may provide access to future investment opportunities.

Property Dispositions

We continually evaluate our properties to identify those most suitable to meet our long-term earnings ~~growth~~and cash flow growth objectives and contribute to increasing portfolio value. Properties that no longer meet our objectives are ~~identified~~evaluated ~~as non-core holdings and are targeted~~ for sale, or in certain cases, joint venture to release equity created through management's value enhancement programs or to take advantage of opportune market valuations.

Capital generated from these dispositions is efficiently re-deployed into property acquisitions and investments in debt and preferred equity investments that we expect will provide enhanced future capital gains and earnings growth opportunities.

Competition

The leasing of real estate is highly competitive, especially in the Manhattan office market. We compete for tenants with landlords and developers of similar properties located in our markets primarily on the basis of location, rent charged, services provided, balance sheet strength and liquidity and the design and condition of our properties. Although currently no other publicly traded REIT has been formed primarily to acquire, own, reposition and manage Manhattan commercial office properties, we may in the future compete with such other REITs. In addition, we face competition from other real estate companies including other REITs that currently invest in markets other than or in addition to Manhattan, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships, individual investors and others that may have greater financial resources or access to capital than we do or that are willing to acquire properties in transactions which are more highly leveraged or with different financial attributes than we are willing to pursue.

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PART I

ITEM 1. BUSINESS

formed primarily to acquire, own, reposition and manage Manhattan commercial office properties, we may in the future compete with such other REITs. In addition, we face competition from other real estate companies including other REITs that currently invest in markets other than or in addition to Manhattan, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships, individual investors and others that may have greater financial resources or access to capital than we do or that are willing to acquire properties in transactions which are more highly leveraged or with different financial attributes than we are willing to pursue.

Manhattan Office Market Overview

Manhattan is by far the largest office market in the United States, containing more rentable square feet than the next five largest central business district office markets combined. The properties in our portfolio are concentrated in some of Manhattan's most prominent midtown locations.

According to Cushman and Wakefield Research Services, Manhattan has a total inventory of 392.90 million square feet, including 241.25 million square feet in midtown. Based on current construction activity, we estimate that midtown Manhattan will have approximately 01.8 million square feet of new construction becoming available in the next two years, ~~none~~23.5% of which is pre-leased. This will add approximately 0.25% to Manhattan's total inventory.

General Terms of Leases in the midtown Manhattan Markets

Leases entered into for space in the midtown Manhattan markets typically contain terms ~~which~~that may not be contained in leases in other U.S. office markets. The initial term of leases entered into for space in the midtown Manhattan markets is generally ~~five~~seven to fifteen years. Tenants leasing space in excess of 10,000 square feet for an initial term of 10 years or longer often will negotiate an option to extend the term of the lease for one or two renewal periods, typically for a term of five years each. The base rent during the initial term often will provide for agreed-upon periodic increases over the term of the lease. Base rent for renewal terms is most often based upon the then fair market rental value of the premises as of the commencement date of the applicable renewal term (determined by binding arbitration in the event the landlord and the tenant are unable to mutually agree upon the fair market value), though ~~in rare cases~~ base rent for a renewal period may be set at 95% of the then fair market rent. Very infrequently, leases may contain termination options whereby tenants can terminate their lease obligations upon payment of a penalty together with repayment of the unamortized portion of the landlord's transaction costs (e.g., brokerage commissions, free rent periods, tenant improvement allowances, etc.).

In addition to base rent, the tenant will generally also pay its pro rata share of increases in real estate taxes and operating expenses for the building over a base year (which is typically the year during which the term of the lease commences) based upon the tenant's proportionate occupancy of the building. In some smaller leases (generally less than 10,000 square feet), in lieu of paying additional rent based upon increases in building operating expenses, base rent will be increased each year during the lease term by a set percentage on a compounding basis (though the tenant will still pay its pro rata share of increases in real estate taxes over a base year).

Tenants typically receive a free rent period following commencement of the lease term, which in some cases may coincide with the tenant's construction period.

~~Electricity~~The islandlord most often ~~supplied~~supplies byelectricity ~~the landlord~~ either on a sub-metered basis at the landlord's cost plus a fixed percentage or a rent inclusion basis (i.e., a fixed fee is added to the base rent for electricity, which amount may increase based upon increases in electricity rates or increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and freight elevator service during business hours and base building cleaning) typically are provided at no additional cost, but are included in the building's operating expenses, with the tenant paying additional rent only for services which exceed base building services or for services which are provided other than during normal business hours.

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of ~~PART~~invoices Ifor the cost of construction and lien waivers. However, in certain leases (most often for relatively small amounts of space), the landlord will construct the premises for the tenant at a cost to the landlord not to exceed an agreed upon amount with the tenant paying any excess. In addition, landlords may rent to a tenant a space that is "pre-built" (i.e., space that was constructed by the landlord in advance of lease signing and ready to move in with the tenant selecting paint and carpet colors).

ITEM 1. BUSINESS

electricity, which amount may increase based upon increases in electricity rates or increases in electrical usage by the tenant). Base building services other than electricity (such as heat, air conditioning and freight elevator service during business hours and base building cleaning) typically are provided at no additional cost, but are included in the building's operating expenses, with the tenant paying additional rent only for services which exceed base building services or for services which are provided other than during normal business hours.

In a typical lease for a new tenant renting in excess of 10,000 feet, the landlord will deliver the premises with existing improvements demolished and any asbestos abated. In such instances, the landlord also typically will provide a tenant improvement allowance, which is a fixed sum that the landlord makes available to the tenant to reimburse the tenant for all or a portion of the tenant's initial construction of its premises. Such sum typically is payable as work progresses, upon submission of invoices for the cost of construction and lien waivers. However, in certain leases (most often for relatively small amounts of space), the landlord will construct the premises for the tenant at a cost to the landlord not to exceed an agreed upon amount with the tenant paying any excess. In addition, landlords may rent to a tenant a space that is "pre-built" (i.e., space that was constructed by the landlord in advance of lease signing and ready to move in with the tenant selecting paint and carpet colors).

Occupancy

The following table sets forth the weighted average occupancy rates at our office properties based on space leased as of December 31, ~~2011~~2012, ~~2010~~2011 and ~~2009~~2010:

	Percent Occupied as of December 31,
Property	~~2011~~2012			~~2010~~2011			~~2009~~2010
Manhattan Properties		9294.51	%		92.95	%		9592.09	%
Suburban Properties		8681.23	%		8786.32	%		8887.73	%
Same-Store Properties(1)		90.3	%		89.46	%		N/A
Unconsolidated Joint Venture Properties		92.39	%		9594.20	%		95.12	%
Portfolio		91.27	%		91.65	%		9391.6	%

(1)Same-Store Properties for ~~2011~~2012 represents 4546 of our 5152 consolidated properties owned by us at January 1, ~~2010~~2011 and still owned by us at December 31, ~~2011~~2012 in the same manner. ~~This excludes 28 West 44th Street which was sold in 2011.~~

Rent Growth

We estimated that rents in place at December 31, ~~2011~~2012 for all leases expiring in future periods in our Manhattan and Suburban consolidated properties were approximately 1013.97% and 31.05%, respectively, below management's estimates of current market asking rents. Taking rents are typically lower than asking rents and may vary from property to property. We estimated that rents in place at December 31, ~~2011~~2012 for all leases expiring in future periods in our Manhattan and Suburban properties owned through unconsolidated joint ventures were approximately 810.8% below and 95.90% above, respectively, ~~below~~ management's estimates of current market asking rents. ~~These~~At ~~comparative~~December 31, ~~measures~~2011, ~~were~~the estimated rents in place were approximately 510.09% and 53.10% ~~at December 31, 2010~~ for the consolidated properties and 168.38% and 9.39% for the unconsolidated joint venture properties below management's estimates of the then current market asking rents. As of December 31, ~~2011~~2012, approximately 4337.65% and 3556.04% of all leases in-place in our Manhattan and Suburban consolidated properties, respectively, were scheduled to expire during the next five years. As of December 31, 2012, approximately 19.6% and 69.6% of all leases in-place in our Manhattan and Suburban properties owned through unconsolidated joint ~~venture~~ventures, respectively, were also scheduled to expire during the next five years. There can be no assurances that our estimates of current market rents are accurate, that market rents currently prevailing will not erode in the future or that we will realize any rent growth. However, we believe that rents, which in the current portfolio are below market, provide a potential for long-term internal growth.

Industry Segments

We acquire, own, reposition, manage and lease commercial office, retail and multi-family properties in the New York Metropolitan area and have two reportable segments: real estate and debt and preferred equity investments. We evaluate real estate performance and allocate resources based on earnings contribution to income from continuing operations.

At December 31, 2012, our real estate portfolio was primarily located in one geographical market, the New York Metropolitan area. The primary sources of revenue are generated from tenant rents and

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escalations ~~PART~~and Ireimbursement revenue. Real estate property operating expenses consist primarily of security, maintenance, utility costs, real estate taxes and ground rent expense (at certain applicable properties). As of December 31, 2012, one tenant in our portfolio contributed approximately 6.9% of our Portfolio annualized cash rent. No other tenant contributed more than 6.4% of our Portfolio annualized cash rent. Portfolio annualized cash rent includes our consolidated annualized cash rent and our share of joint venture annualized cash rent. No property contributed in excess of 8.7% of our consolidated total revenue for 2012. In addition, two debt and preferred equity investments each accounted for more than 10.0% of the revenue earned on debt and preferred equity investments in 2012. Our industry segments are discussed in Note 18, "Segment Information," in the accompanying consolidated financial statements.

ITEM 1. BUSINESS

properties, respectively, are scheduled to expire during the next five years. There can be no assurances that our estimates of current market rents are accurate, that market rents currently prevailing will not erode in the future or that we will realize any rent growth. However, we believe that rents, which in the current portfolio are below market, provide a potential for long-term internal growth.

Industry Segments

We acquire, own, reposition, manage and lease commercial office, retail and multi-family properties in the New York Metropolitan area and have two reportable segments: real estate, and debt and preferred equity investments. We evaluate real estate performance and allocate resources based on earnings contribution to income from continuing operations.

At December 31, 2011, our real estate portfolio was primarily located in one geographical market, namely, the New York Metropolitan area. The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue. Real estate property operating expenses consist primarily of security, maintenance, utility costs, real estate taxes and ground rent expense (at certain applicable properties). As of December 31, 2011, one tenant in our portfolio contributed approximately 7.2% of our Portfolio annualized cash rent. No other tenant contributed more than 6.9% of our Portfolio annualized cash rent. Portfolio annualized cash rent includes our consolidated annualized cash rent and our share of joint venture annualized cash rent. No property contributed in excess of 8.4% of our consolidated total revenue for 2011. In addition, two debt and preferred equity investments each accounted for more than 10.0% of the revenue earned on debt and preferred equity investments in 2011. Our industry segments are discussed in Note 18, "Segment Reporting" in the accompanying consolidated financial statements.

Employees

At December 31, ~~2011~~2012, we employed approximately 1,~~047~~092 employees, over ~~164~~171 of who were managers and professionals, approximately ~~783~~817 of whom were hourly-paid employees involved in building operations and approximately ~~100~~104 of whom were clerical, data processing and other administrative employees. There are currently three collective bargaining agreements which cover the workforce that services substantially all of our properties.

Acquisitions

During ~~2011~~2012, we acquired or12 ~~consolidated joint venture interests on five~~ properties for aggregate gross purchase prices of $2641.03 ~~billion~~million encompassing 31.61 million square feet. In addition, we invested in ~~four~~five properties through joint ventures for aggregate gross purchase prices of $1626.87 ~~billion~~million and encompassing 0.6 million square feet. We also acquired an ownership interest in a portfolio of 31 west coast office properties encompassing 24.05 million square feet.

Dispositions

During ~~2011~~2012, we sold 28our ~~West~~fee ~~44th Street~~interest ~~for~~at a292 ~~gross~~Madison ~~contract~~Avenue ~~price~~for of $~~161~~85.0 million. Weand recognized a gain of ~~approximately~~ $466.16 million on the sale. ofIn ~~this property~~addition, ~~which~~we ~~encompassed 0.4 million square feet. We~~ also sold our 49.5% partnership interest in ~~1551/1555~~521 ~~Broadway~~Fifth Avenue at an implied gross valuation of $~~276~~315.80 million and recognized a gain of approximately $419.04 million on the sale. We also sold interests in four joint ventures for an aggregate sales price of ~~our~~$1.2 billion, ~~interest~~which encompassed 1.6 million square feet and recognized gains aggregating $17.7 million on such sales.

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PART I

ITEM 1. BUSINESS

Debt and Preferred Equity Investments

During ~~2011~~2012, we originated or acquired approximately $~~622~~672.59 million in debt and preferred equity investments (net of new discounts), inclusive of accretion of previous discounts and pay-in-kind interest. We ~~also~~ recorded approximately $~~600~~298.37 million in sales, repayments, participations~~, foreclosures~~ and ~~loan loss reserves in 2011~~ foreclosures. ~~Included~~We inalso ~~this~~recorded ~~was approximately~~ $63.50 million ofin loan loss reserves, ~~net~~in ~~of recoveries~~2012.

Offering/Financings

In November ~~2011~~2012, we ~~closed~~entered oninto a $1.56 billion ~~4-year~~credit ~~revolving~~facility, or the 2012 credit facility, ~~with~~which refinanced, extended and upsized our previous 2011 revolving credit facility. The 2012 credit facility consists of a $1.2 billion revolving credit facility, which matures in March 2017 with two six-~~year~~month ~~as-of-right~~ extension ~~option~~options, and a $400.0 million term loan facility, which matures in March 2018. The revolving credit facility and term loan facility currently ~~bears~~bear interest at ~~150~~145 basis points and 165 basis points over LIBOR, respectively, based on the unsecured bond rating of ~~Reckson~~ROP. ~~Operating Partnership,~~SL LGreen and ROP are also borrowers under the 2012 credit facility.P.

SL Green sold 6.7 million shares of its common stock through its "at-the-market" equity offering programs raising net proceeds of $517.1 million which were used to repay certain of its existing indebtedness, make investments in additional properties and debt and preferred equity investments, and for general corporate purposes. Net proceeds from these offerings (approximately $517.1 million) were contributed to us in exchange for 6.7 million common partnership units. 9

~~We issued~~Table ~~$250.0 million principal amount~~ of 5.00% senior notes due 2018 at par. The net proceeds from the offering (approximately $246.5 million) were used to repay certain of our existing indebtedness, make investments in additional properties and debt and preferred equity investments, and for general corporate purposes. SL Green and ROP are co-obligors of these notes. Contents

~~During~~In ~~2011~~2012, weSL ~~also~~Green ~~closed~~sold on2.6 million 15shares ~~mortgages~~of ~~and~~its ~~other~~common ~~loans~~stock ~~payable,~~through its "at-the-market" equity offering program raising net proceeds of $201.3 million which ~~are~~were ~~collateralized~~used byto ~~our~~repay ~~real~~certain ~~estate~~of its existing indebtedness, to make investments in additional properties and debt and preferred equity investments, ~~totaling~~and ~~approximately~~for general corporate $3purposes.3 Net proceeds from these offerings were contributed to us in exchange for 2.6 ~~billion~~million common partnership units.

In November 2012, we issued $200.0 million principal amount of 4.50% senior unsecured notes due in 2022 at par. The net proceeds from the offering (approximately $198.2 million) were used to repay certain of our existing indebtedness, to make investments in additional properties and debt and preferred equity investments, and for general corporate purposes. SL Green and ROP are co-obligors of these notes.

During 2012, we issued 6.50% Series I cumulative redeemable preferred units of limited partnership interest generating net proceeds to the Operating Partnership of $222.2 million, redeemed the entire $100.0 million, 7.875% Series D cumulative redeemable preferred units of limited partnership interest and redeemed $100.0 million of the 7.625% Series C cumulative redeemable preferred units of limited partnership interest.

In December 2012, SL Green repurchased $42.4 million aggregate principal amounts of senior unsecured notes, consisting of $22.7 million of ROP's 5.875% Notes due 2014 and $19.7 million of ROP's 6.0% Notes due 2016, for a total consideration of $46.4 million and realized a net loss on early extinguishment of debt of approximately $3.8 million.

During 2012, we also closed on six mortgages and other loans payable, which are collateralized by our real estate, debt and preferred equity investments, totaling approximately $1.3 billion. Our joint ventures closed on eight mortgages and other loans totaling approximately $1.8 billion.

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PART I

ITEM 1A. RISK FACTORS

Declines in the demand for office space in New York City, and in particular, midtown Manhattan, as well as our Suburban markets, including Westchester County, Connecticut, Northern New Jersey and Long Island, resulting from ~~general~~future weakness in the economic ~~conditions~~condition of such markets could adversely affect the value of our real estate portfolio and our results of operations and, consequently, our ability to service current debt and make distributions to SL Green.

Most of our commercial office properties, based on square footage, are located in midtown Manhattan. As a result, our business is dependent on the condition of the New York City economy in general and the market for office space in midtown Manhattan in particular. ~~Continuing~~Future weakness and uncertainty in the New York City economy could materially reduce the value of our real estate portfolio and our rental revenues, and thus adversely affect our cash flow and ability to service current debt and make distributions to SL Green. Similarly, ~~continuing~~future weakness and uncertainty in our suburban markets could adversely affect our cash flow and ability to service current debt and make distributions to SL Green.

We may be unable to renew leases or relet space as leases expire.

When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if tenants do renew or we can relet the space, the terms of renewal or reletting, taking into account among other things, the cost of tenant improvements and leasing commissions, may be less favorable than the terms in the expired leases. As of December 31, ~~2011~~2012, approximately 78.03 million and 12.90 million square feet, representing approximately 40.02% and 6546.02% of the rentable square feet, ~~are~~were scheduled to expire by December 31, ~~2016~~2017 at our consolidated properties and unconsolidated joint venture properties, respectively, and as of December 31, ~~2011~~2012, these leases had annualized escalated rent totaling approximately $~~448~~422.68 million and $~~102~~90.26 million, respectively. We also have leases with termination options beyond ~~2016~~2017. If we are unable to promptly renew the leases or relet the space at similar rates, our cash flow and ability to service debt and make distributions to SL Green could be adversely affected.

The expiration of long term leases or operating sublease interests could adversely affect our results of operations.

Our interests in 673 First Avenue, 420 Lexington Avenue, 461 Fifth Avenue, 711 Third Avenue, 625 Madison Avenue, 1185 Avenue of the Americas and 1080 Amsterdam Avenue, all in Manhattan, and 1055 Washington Avenue, Stamford, Connecticut, are through either long-term leasehold or operating sublease interests in the land and the improvements, rather than by ownership of fee interest in the land. We have the ability to acquire the fee position at 461 Fifth Avenue for a fixed price on a specific date. Unless we can purchase a fee interest in the underlying land or extend the terms of these leases before their expiration, we will lose our right to operate these properties upon expiration of the leases, which would significantly adversely affect our results of operations. The average remaining term of these long-term leases as of December 31, ~~2011~~2012, including our unilateral extension rights on each of the properties, is approximately 4172 years. Pursuant to the leasehold arrangement, we, as tenant under the operating sublease, perform the functions traditionally performed by landlords with respect to our subtenants. We are responsible for not only collecting rent from our subtenants, but also maintaining the property and paying expenses relating to the property. Our share of annualized cash rents of these properties at December 31, ~~2011~~2012 totaled approximately $~~244~~257.24 million, or 2122%, of our share of total Portfolio annualized cash rent.

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~~PART~~ IOur results of operations rely on major tenants and insolvency, bankruptcy or receivership of these or other tenants could adversely affect our results of operations.

Giving ~~ITEM~~effect 1Ato leases in effect as of December 31, 2012 for consolidated properties and unconsolidated joint venture properties, as of that date, our five largest tenants, based on square footage leased, accounted for approximately 22. ~~RISK~~1% ~~FACTORS~~of our share of Portfolio annualized cash rent, with three tenants, Citigroup, Inc., Viacom International Inc. and Credit Suisse Securities (USA) LLC accounting for approximately 6.4%, 6.9% and 6.0% of our share of Portfolio annualized cash rent, respectively. In addition, the financial services sector, which has been volatile in recent years, accounted for approximately 36% of our Portfolio annualized cash rent as of December 31, 2012. This sector continues to experience turmoil. If current conditions in the industries in which our tenants are concentrated deteriorate, we may experience increases in past due accounts, defaults, lower occupancy and reduced effective rents. Our business would be adversely affected if any of our major tenants became insolvent, declared bankruptcy, are put into receivership or otherwise refused to pay rent in a timely fashion or at all.

Our results of operations rely on major tenants, including in the financial services sector, and insolvency, bankruptcy or receivership of these or other tenants could adversely affect our results of operations.

Giving effect to leases in effect as of December 31, 2011 for consolidated properties and unconsolidated joint venture properties, as of that date, our five largest tenants, based on square footage leased, accounted for approximately 23.3% of our share of Portfolio annualized cash rent, with three tenants, Citigroup, Inc., Viacom International Inc. and Credit Suisse Securities (USA) LLC accounting for approximately 7.2%, 6.9% and 6.4% of our share of Portfolio annualized cash rent, respectively. In addition, the financial services sector accounted for approximately 39% of our Portfolio annualized cash rent as of December 31, 2011. This sector continues to experience significant turmoil. If current economic conditions persist or deteriorate, we may experience increases in past due accounts, defaults, lower occupancy and reduced effective rents, particularly in respect of our financial service tenants. Our business would be adversely affected if any of our major tenants became insolvent, declared bankruptcy, are put into receivership or otherwise refused to pay rent in a timely fashion or at all.

Adverse economic and geopolitical conditions in general and the Northeastern commercial office markets in particular could have a material adverse effect on our results of operations, financial condition and our ability to service debt and make distributions to SL Green.

Our business may be affected by ~~the unprecedented~~ volatility ~~and illiquidity~~ in the financial and credit markets and other market or economic challenges experienced by the U.S. economy or real estate industry as a whole., Assuch as those experienced as a result of the economic downturn that began in the second half of 2007, ~~demand~~which lead to a nationwide decline in demand for office and retail space ~~declined~~ ~~nationwide~~ due to bankruptcies, downsizing, layoffs and cost cutting. ~~Real~~Future ~~estate~~periods ~~transactions~~of ~~and development opportunities lessened compared to the period prior to the current~~ economic ~~downturn~~ ~~and~~weakness ~~capitalization~~could ~~rates rose. As a~~ result, ~~the cost and availability of credit was, and may~~ in ~~down~~reduced ~~markets~~access ~~be,~~to ~~adversely affected by illiquid~~ credit ~~markets~~ and/or wider credit spreads. Economic ~~weakness and~~ uncertainty, including concern about the stability of the markets generally ~~and the strength of counterparties specifically has led~~, ~~and~~ may lead, many lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers,which ~~and~~could ~~this may~~ adversely affect our liquidity and financial condition, and the liquidity and financial condition of our tenants. Our business may also be adversely affected by local economic conditions, as substantially all of our revenues are derived from our properties located in the Northeast, particularly in New York, Northern New Jersey and Connecticut. Because our portfolio consists primarily of commercial office buildings (as compared to a more diversified real estate portfolio) located principally in Manhattan, if ~~negative~~ economic conditions ~~persist or~~ deteriorate, then our results of operations, financial condition and ability to service current debt and to make distributions to SL Green may be adversely affected. Specifically, our business may be affected by the following conditions:

•: significant job losses in the financial and professional services industries which may decrease demand for our office space, causing market rental rates and property values to be negatively impacted;
•: our ability to borrow on terms and conditions that we find acceptable may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from both our existing operations and our acquisition and development activities and increase our future interest expense;
•: reduced values of our properties, which may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; and
•: reduced liquidity in debt markets and increased credit risk premiums for certain market participants, which may impair our ability to access capital.

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PART I

ITEM 1A. RISK FACTORS

These conditions, which could have a material adverse effect on our results of operations, financial condition and ability to service debt and make distributions to SL Green, may continue or worsen in the future.

We may suffer adverse consequences if our revenues decline since our operating costs do not necessarily decline in proportion to our revenue.

We earn a significant portion of our income from renting our properties. Our operating costs, however, do not necessarily fluctuate in proportion to changes in our rental revenue. As a result, our costs will not necessarily decline even if our revenues do. Similarly, our operating costs could increase while our revenues stay flat or decline. In either such event, we may be forced to borrow to cover our costs, we may incur losses or we may not have cash available to service our debt and make distributions to SL Green.

We face risks associated with property acquisitions.

We may acquire individual properties and portfolios of properties, including large portfolios that could significantly increase our size and alter our capital structure. Our acquisition activities may be exposed to, and their success may be adversely affected by, the following risks:

•: even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing;
•: we may be unable to finance acquisitions on favorable terms or at all;
•: acquired properties may fail to perform as we expected;
•: our estimates of the costs of repositioning or redeveloping acquired properties may be inaccurate;
•: we may not be able to obtain adequate insurance coverage for new properties;
•: acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and
•: we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and therefore our results of operations and financial condition could be adversely affected.

We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us arising from our ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow. Unknown liabilities with respect to properties acquired might include:

•: claims by tenants, vendors or other persons arising from dealing with the former owners of the properties;
•: liabilities incurred in the ordinary course of business;
•: claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties; and
•: liabilities for clean-up of undisclosed environmental contamination.

Competition for acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions.

We plan to continue to acquire properties as we are presented with attractive opportunities. We may face competition for acquisition opportunities from other investors, particularly those investors

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who ~~PART~~can Iincur more leverage, and this competition may adversely affect us by subjecting us to the following risks:

•: an inability to acquire a desired property because of competition from other well-capitalized real estate investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors; and
•: an increase in the purchase price for such acquisition property, in the event we are able to acquire such desired property.

~~ITEM~~We ~~1A. RISK~~rely ~~FACTORS~~on six large properties for a significant portion of our revenue.

~~from~~ Six of our ~~ownership~~properties, 420 Lexington Avenue, 485 Lexington Avenue, One Madison Avenue, 1185 Avenue of ~~those~~the ~~properties~~Americas, we1515 Broadway ~~might~~and ~~have~~388-390 toGreenwich ~~pay~~Street, ~~substantial~~accounted ~~sums~~for toapproximately ~~settle~~37.1% itof our Portfolio annualized cash rent, which ~~could~~includes our share of joint venture annualized rent as of December 31, 2012. Our revenue and cash available for distribution to SL Green would be materially adversely ~~affect~~affected if any of these properties were materially damaged or destroyed. Additionally, our revenue and cash ~~flow.~~available ~~Unknown~~to ~~liabilities~~service ~~with~~debt ~~respect~~and make distribution to SL Green would be materially adversely affected if tenants at these properties ~~acquired~~fail ~~might~~to timely make rental ~~include:~~payments due to adverse financial conditions or otherwise, default under their leases or filing for bankruptcy.

Competition for acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions.

We plan to continue to acquire properties as we are presented with attractive opportunities. We may face competition for acquisition opportunities from other investors, particularly those investors who can incur more leverage, and this competition may adversely affect us by subjecting us to the following risks:

We rely on five large properties for a significant portion of our revenue.

Five of our properties, 420 Lexington Avenue, One Madison Avenue, 1185 Avenue of the Americas, 1515 Broadway and 388-390 Greenwich Street, accounted for approximately 32% of our Portfolio annualized cash rent, which includes our share of joint venture annualized rent as of December 31, 2011. Our revenue and cash available for distribution to SL Green would be materially adversely affected if any of these properties were materially damaged or destroyed. Additionally, our revenue and cash available to service debt and make distribution to SL Green would be materially adversely affected if tenants at these properties fail to timely make rental payments due to adverse financial conditions or otherwise, default under their leases or filing for bankruptcy.

The continuing threat of terrorist attacks may adversely affect the value of our properties and our ability to generate cash flow.

There may be a decrease in demand for space in New York City because it is considered at risk for future terrorist attacks, and this decrease may reduce our revenues from property rentals. In the aftermath of a terrorist attack, tenants in the New York ~~City~~Metropolitan area may choose to relocate their business to less populated, lower-profile areas of the United States that those tenants believe are not as likely to be targets of future terrorist activity. This in turn could trigger a decrease in the demand for space in the New York ~~City~~ Metropolitan area, which could increase vacancies in our properties and force us to lease our properties on less favorable terms. As a result, the value of our properties and the level of our revenues could materially decline.

A terrorist attack could cause insurance premiums to increase significantly.

We maintain "all-risk" property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism) within two property insurance portfolios and liability insurance. As of December 31, 2012, the first property portfolio maintains a blanket limit of $775.0 million per occurrence, including terrorism, for the majority of the New York City properties in our portfolio. The second portfolio maintains a limit of $750.0 million per occurrence, including terrorism, for some New York City properties and the majority of the Suburban properties. Both policies expire on December 31, 2013. Each policy includes $100.0 million of flood coverage, with a lower sublimit for locations in high hazard flood zones. We maintain liability policies which cover all our properties and provide limits of $201.0 million per occurrence and in the aggregate per location. The liability policies expire on October 31, 2013. Additional coverage may be purchased on a stand-alone basis for certain assets.

In October 2006, SL Green formed a wholly-owned taxable REIT subsidiary, Belmont Insurance Company, or Belmont, to act as a captive insurance company and be one of the elements of its overall insurance program. Belmont was formed in an effort to, among other reasons, stabilize to some extent the fluctuations of insurance market conditions. Belmont is licensed in New York to write Terrorism, NBCR (nuclear, biological, chemical, and radiological), General Liability, Environmental Liability and D&O coverage.

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•: Terrorism: Belmont acts as a direct property insurer with respect to a portion of our terrorism coverage for the New York City properties. Belmont has a terrorism coverage limit of $650.0 million in a layer in excess of $100.0 million. In addition, Belmont purchased reinsurance to reinsure the retained insurable risk not otherwise covered under Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007, or TRIPRA, as detailed below.
•: NBCR: Belmont has acted as a direct insurer of NBCR and since December 31, 2011, has provided coverage up to $750 million on our entire property portfolio for certified acts of terrorism above a program trigger of $100.0 million. Belmont is responsible for a small deductible and 15% of a loss, with the remaining 85% covered by the Federal government.
•: General Liability: For the period commencing October 31, 2010, Belmont insures a retention on the general liability insurance of $150,000 per occurrence and a $2.1 million annual aggregate stop loss limit. We have secured excess insurance to protect against catastrophic liability losses above the $150,000 retention. Prior policy years carried a higher per occurrence deductible and/or higher aggregate stop loss. Belmont has retained a third party administrator to manage all claims within the retention and we anticipate that direct management of liability claims will improve loss experience and ultimately lower the cost of liability insurance in future years. In addition, we have an umbrella liability policy of $200.0 million per occurrence and in the aggregate on a per location basis.
•: Environmental Liability: Belmont insures a deductible of $975,000 per occurrence in excess of $25,000 on a $25.0 million per occurrence and $30.0 million aggregate environmental liability policy covering the entire portfolio.

As ~~PART~~long Ias we own Belmont, we are responsible for its liquidity and capital resources, and the accounts of Belmont are part of our consolidated financial statements. If we experience a loss and Belmont is required to pay under its insurance policy, we would ultimately record the loss to the extent of Belmont's required payment. Therefore, insurance coverage provided by Belmont should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance.

The Terrorism ~~ITEM~~Risk 1AInsurance Act, or TRIA, which was enacted in November 2002, was renewed on December 31, 2007. ~~RISK~~ ~~FACTORS~~Congress extended TRIA, now called TRIPRA (Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007) until December 31, 2014. The law extends the federal Terrorism Insurance Program that requires insurance companies to offer terrorism coverage and provides for compensation for insured losses resulting from acts of certified terrorism, subject to the current program trigger of $100.0 million. There is no assurance that TRIPRA will be extended. Our debt instruments, consisting of mortgage loans secured by our properties (which are generally non-recourse to us), mezzanine loans, ground leases, our 2012 credit facility, senior unsecured notes and other corporate obligations, contain customary covenants requiring us to maintain insurance. Although we believe that we currently maintain sufficient insurance coverage to satisfy these obligations, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. In such instances, there can be no assurance that the lenders or ground lessors under these instruments will not take the position that a total or partial exclusion from "all-risk" insurance coverage for losses due to terrorist acts is a breach of these debt and ground lease instruments allowing the lenders or ground lessors to declare an event of default and accelerate repayment of debt or recapture of ground lease positions. In addition, if lenders prevail in asserting that we are required to maintain full coverage for these risks, it could result in substantially higher insurance premiums.

We monitor Aall ~~terrorist~~properties ~~attack~~that ~~could~~are ~~cause~~subject to triple net leases to ensure that tenants are providing adequate coverage. Certain joint ventures may be covered under policies separate from our policies, at coverage limits which we deem to be adequate. We continually monitor these policies. Although we consider our insurance ~~premiums~~coverage to ~~increase~~be ~~significantly~~appropriate, in the event of a major catastrophe, such as an act of terrorism, we may not have sufficient coverage to replace certain properties.

We maintain "all-risk" property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism) within two property insurance portfolios and liability insurance. The first property portfolio maintains a blanket limit of $750.0 million per occurrence, including terrorism, for the majority of the New York City properties in our portfolio. This policy expires on December 31, 2012. The second portfolio maintains a limit of $600.0 million per occurrence, including terrorism, for some New York City properties and the majority of the Suburban properties. The second property policy expires on December 31, 2012. Additional coverage may be purchased on a stand-alone basis for certain assets. We maintain liability policies which cover all our properties and provide limits of $201.0 million per occurrence and in the aggregate per location. The liability policies expire on October 31, 2012.

In October 2006, SL Green formed a wholly-owned taxable REIT subsidiary, Belmont Insurance Company, or Belmont, to act as a captive insurance company and be one of the elements of its overall insurance program. Belmont is a subsidiary of ours. Belmont was formed in an effort to, among other reasons, stabilize to some extent the fluctuations of insurance market conditions. Belmont is licensed in New York to write Terrorism, NBCR (nuclear, biological, chemical, and radiological), General Liability, Environmental Liability and D&O coverage.

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ITEM 1A. RISK FACTORS

of Belmont's required payment. Therefore, insurance coverage provided by Belmont should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance.

The Terrorism Risk Insurance Act, or TRIA, which was enacted in November 2002, was renewed on December 31, 2007. Congress extended TRIA, now called TRIPRA (Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007) until December 31, 2014. The law extends the federal Terrorism Insurance Program that requires insurance companies to offer terrorism coverage and provides for compensation for insured losses resulting from acts of certified terrorism, subject to the current program trigger of $100.0 million. Our debt instruments, consisting of mortgage loans secured by our properties (which are generally non-recourse to us), mezzanine loans, ground leases, our 2011 revolving credit facility and other corporate obligations, contain customary covenants requiring us to maintain insurance. Although we believe that we currently maintain sufficient insurance coverage to satisfy these obligations, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. In such instances, there can be no assurance that the lenders or ground lessors under these instruments will not take the position that a total or partial exclusion from "all-risk" insurance coverage for losses due to terrorist acts is a breach of these debt and ground lease instruments allowing the lenders or ground lessors to declare an event of default and accelerate repayment of debt or recapture of ground lease positions. In addition, if lenders prevail in asserting that we are required to maintain full coverage for these risks, it could result in substantially higher insurance premiums.

We have a 49.9% interest in the property at 100 Park Avenue, where we participate with Prudential, which carries a blanket policy of $500.0 million of "all-risk" property insurance, including terrorism coverage. We own One Madison Avenue, which is under a triple net lease with insurance provided by the tenant, Credit Suisse Securities (USA) LLC, or CS. We have a 50.6% interest in the property at 388 and 390 Greenwich Street, where we participate with SITQ, which is leased on a triple net basis to Citigroup, N.A., which provides insurance coverage directly. We monitor all triple net leases to ensure that tenants are providing adequate coverage. Other joint ventures may be covered under policies separate from our policies, at coverage limits which we deem to be adequate. We continually monitor these policies. Although we consider our insurance coverage to be appropriate, in the event of a major catastrophe, such as an act of terrorism, we may not have sufficient coverage to replace certain properties.

We face possible risks associated with the physical effects of climate change.

We cannot predict with certainty whether climate change is occurring and, if so, at what rate. However, the physical effects of climate change could have a material adverse effect on our properties, operations and business. For example, we own interests in commercial office properties in the New York Metropolitan area, primarily in midtown Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, ~~Queens,~~ Long Island, Westchester County, Connecticut and Northern New Jersey. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity, such as those experienced in Hurricane Sandy in October 2012, and rising sea-levels. Over time, these conditions could result in declining demand for office space in our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.

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ITEM 1A. RISK FACTORS

Leasing office space to smaller and growth-oriented businesses could adversely affect our cash flow and results of operations.

Many of the tenants in our properties are smaller, growth-oriented businesses that may not have the financial strength of larger corporate tenants. Smaller companies generally experience a higher rate of failure than large businesses. Growth-oriented firms may also seek other office space as they develop. Leasing office space to these companies could create a higher risk of tenant defaults, turnover and bankruptcies, which could adversely affect our distributable cash flow and results of operations.

Debt financing, financial covenants, degree of leverage, and increases in interest rates could adversely affect our economic performance.

Scheduled debt payments could adversely affect our results of operations.

Cash flow could be insufficient to make distributions to SL Green and meet the payments of principal and interest required under ~~our~~ our current mortgages and other indebtedness, including our ~~2011~~2012 ~~revolving~~ credit facility, senior unsecured notes, debentures and indebtedness outstanding at our joint venture properties. The total ~~principal~~ principal amount of our outstanding consolidated indebtedness was approximately $6.05 billion as of December 31, ~~2011~~2012, consisting of approximately $~~350~~470.0 million under our ~~2011 revolving~~2012 credit facility, which is inclusive of our $400.0 million term loan, $1.3 billion under our senior unsecured notes, $100.0 million under our junior subordinated deferrable interest debentures and approximately $4.36 billion of non-recourse mortgages and loans payable on 22 of our ~~investments~~properties and acertain ~~recourse~~debt ~~loan~~and preferred equity investments, and recourse loans on ~~one~~two of our investments. In addition, we could increase the amount of our outstanding indebtedness in the future, in part by borrowing under our ~~2011~~2012 ~~revolving~~ credit facility, which had $1.1 billion undrawn capacity as of December 31, ~~2011~~2012. Our ~~2011~~2012 ~~revolving~~ credit facility in aggregate matures in ~~November~~March ~~2015~~2018, ~~and~~which ~~has~~includes atwo ~~one~~six-~~year~~month ~~as-~~extension options on the $1.2 billion revolving credit facility of~~-right~~ ~~extension~~this ~~option~~2012 credit facility. As of December 31, ~~2011~~2012, the total principal amount of non-recourse indebtedness outstanding at the joint venture properties was approximately $45.1 billion, of which our proportionate share was approximately $1.89 billion. As of December 31, 2012, the total principal amount of recourse indebtedness outstanding at the joint venture properties was approximately $218.4 million.

If we are unable to make payments under our ~~2011~~2012 ~~revolving~~ credit facility, all amounts due and owing at such time shall accrue interest at a rate equal to 2% higher than the rate at which each draw was made. If we are unable to make payments under our senior unsecured notes, the principal and unpaid interest will become immediately payable. If a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose on the property, ~~resulting~~ in loss of income and asset value. Foreclosure on mortgaged properties or an inability to make payments under our 2011 revolving credit facility or our senior unsecured notes would have a negative impact on our financial condition and results of operations.

We may not be able to refinance existing indebtedness, which may require substantial principal payments at maturity. In 2012, approximately $119.4 million of corporate indebtedness, no debt on our consolidated properties and $176.5 million of debt on our unconsolidated joint venture properties will mature. At the present time we intend to exercise extension options, repay or refinance the debt associated with our properties on or prior to their respective maturity dates. At the time of refinancing, prevailing interest rates or other factors, such as the possible reluctance of lenders to make commercial real estate loans may result in higher interest rates. Increased interest expense on the refinanced debt would adversely affect cash flow and our ability to service debt and make distributions to SL Green. If any principal payments due at maturity cannot be repaid, refinanced or extended, our cash flow will not be sufficient in all years to repay all maturing debt. 16

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resulting ~~PART~~in Iloss of income and asset value. Foreclosure on mortgaged properties or an inability to make payments under our 2012 credit facility or our senior unsecured notes would have a negative impact on our financial condition and results of operations.

We may ~~ITEM~~not 1Abe able to refinance existing indebtedness, which may require substantial principal payments at maturity. ~~RISK~~ ~~FACTORS~~In 2013, approximately $116.7 million of corporate indebtedness, $182.3 million of mortgage debt on our consolidated properties and $176.5 million which is our share of mortgage debt on our unconsolidated joint venture properties will mature. At the present time we intend to exercise extension options, repay or refinance the debt associated with our properties on or prior to their respective maturity dates. At the time of refinancing, prevailing interest rates or other factors, such as the possible reluctance of lenders to make commercial real estate loans may result in higher interest rates. Increased interest expense on the refinanced debt would adversely affect cash flow and our ability to service debt and make distributions to SL Green. If any principal payments due at maturity cannot be repaid, refinanced or extended, our cash flow will not be sufficient in all years to repay all maturing debt.

Financial covenants could adversely affect our ability to conduct our business.

The mortgages and mezzanine loans on our properties generally contain customary negative covenants that limit our ability to further mortgage the properties, to enter into new leases without lender consent or materially modify existing leases, and to discontinue insurance coverage, among other things. In addition, our ~~2011 revolving~~2012 credit facility and senior unsecured notes contain restrictions and requirements on our method of operations. Our ~~2011~~2012 ~~revolving~~ credit facility and our unsecured notes also require us to maintain designated ratios, including but not limited to, total debt-to-assets, debt service coverage, encumbered assets-to-assets and unencumbered assets-to-unsecured debt. These restrictions could adversely affect our results of operations, our ability to pay debt obligations and make distributions to SL Green.

Rising interest rates could adversely affect our cash flow.

Advances under our ~~2011~~2012 ~~revolving~~ credit facility and certain property-level mortgage debt bear interest at a variable rate. These ~~consolidated~~ consolidated variable rate borrowings totaled approximately $1.36 billion at December 31, ~~2011~~2012. In addition, we could increase the amount of our outstanding variable rate debt in the future, in part by borrowing under our ~~2011~~2012 ~~revolving~~ credit facility, which consisted of a $1.2 billion revolving credit facility and $400.0 million term loan and had $1.1 billion available for draw as of December 31, ~~2011~~2012. Borrowings under our ~~2011~~ revolving credit facility and term loan currently ~~bear~~bore interest at the 30-day LIBOR, plus aspreads ~~spread~~of ~~which~~145 ~~was~~basis ~~150~~points and 165 basis points, respectively, at December 31, ~~2011~~2012. As of December 31, ~~2011~~2012, borrowings under our ~~2011~~2012 ~~revolving~~ credit facility and junior subordinated deferrable interest debentures totaled $~~350~~470.0 million and $100.0 million, respectively, and bore interest at 1.9893% and 5.61%, respectively. We may incur indebtedness in the future that also bears interest at a variable rate or may be required to refinance our debt at higher rates. Accordingly, increases in interest rates ~~above that which we anticipated based upon historical trends~~ could adversely affect our results of operations and financial conditions. At December 31, ~~2011~~2012, a hypothetical 100 basis point increase in interest rates across each of our variable interest rate instruments would increase our annual interest costs by approximately $1215.34 million and would increase our share of joint venture annual interest costs by approximately $4.8.5 million. Accordingly, increases in interest rates could adversely affect our ability to continue to service debt and make distributions to SL Green.

Failure to hedge effectively against interest rate changes may adversely affect results of operations.

The interest rate hedge instruments we use to manage some of our exposure to interest rate volatility involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to ~~interest rate changes. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.~~

~~No limitation on debt could adversely affect our cash flow.~~ 17

SL Green considers its business as a whole in determining the amount of leverage of itself and its subsidiaries, including us. SL Green also considers other factors in making decisions regarding the incurrence of indebtedness, such as the purchase price of properties to be acquired with debt financing, the estimated market value of our properties upon refinancing and the ability of particular properties and our business as a whole to generate cash flow to cover expected debt service. Our organizational documents do not contain any limitation on the amount of indebtedness we may incur. As a result, if

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interest ~~PART~~rate Ichanges. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

~~ITEM~~No ~~1A. RISK~~limitation ~~FACTORS~~on debt could adversely affect our cash flow.

we SL Green considers its business as a whole in determining the amount of leverage of itself and its subsidiaries, including us. SL Green also considers other factors in making decisions regarding the incurrence of indebtedness, such as the purchase price of properties to be acquired with debt financing, the estimated market value of our properties upon refinancing and the ability of particular properties and our business as a whole to generate cash flow to cover expected debt service. Our organizational documents do not contain any limitation on the amount of indebtedness we may incur. As a result, if we become more highly leveraged, an increase in debt service could adversely affect cash available for distributions to SL Green and could increase the ~~rise~~risk of default on our indebtedness.

Debt and ~~Preferred~~preferred ~~Equity~~equity ~~Investments~~investments could cause us to incur expenses, which could adversely affect our results of operations.

We owned first mortgages, mezzanine loans, junior participations and preferred equity interests in 2322 investments with an aggregate net book value of approximately $~~985~~1.94 ~~million~~billion at December 31, ~~2011~~2012. Such investments may or may not be recourse obligations of the borrower and are not insured or guaranteed by governmental agencies or otherwise. In the event of a default under these obligations, we may have to take possession of the collateral securing these interests. Borrowers may contest enforcement of foreclosure or other remedies, seek bankruptcy protection against such enforcement and/or bring claims for lender liability in response to actions to enforce their obligations to us. Relatively high loan-to-value ratios and declines in the value of the property may prevent us from realizing an amount equal to our investment upon foreclosure or realization even if we make substantial improvements or repairs to the underlying real estate in order to maximize such property's investment potential.

We maintain and regularly evaluate financial reserves to protect against potential future losses. Our reserves reflect management's judgment of the probability and severity of losses and the value of the underlying collateral. We cannot be certain that our judgment will prove to be correct and that our reserves will be adequate over time to protect against future losses because of unanticipated adverse changes in the economy or events adversely affecting specific properties, assets, tenants, borrowers, industries in which our tenants and borrowers operate or markets in which our tenants and borrowers or their properties are located. We recorded approximately $103.90 million in loan loss reserves and charge offs in ~~2011~~2012 on debt and preferred equity investments being held to maturity and $42.4 million in recoveries of loans previously reserved. If our reserves for credit losses prove inadequate, we could suffer losses which would have a material adverse effect on our financial performance, the market prices of our securities and our ability to service debt and make distributions to SL Green.

Special servicing activities could result in liability to us.

We provide special servicing activities on behalf of third parties. We have been rated by Fitch and S&P to provide such services. An intended or unintended breach of the servicing standards and/or our fiduciary duties to bondholders could result in material liability to us.

Joint investments could be adversely affected by our lack of sole decision-making authority and reliance upon a co-venturer's financial condition.

We co-invest with third parties through partnerships, joint ventures, co-tenancies or other structures, acquiring non-controlling interests in, or sharing responsibility for managing the affairs of, a property, partnership, joint venture, co-tenancy or other entity. Therefore, we will not be in a position to exercise sole decision-making authority regarding such property, partnership, joint venture or other entity. Investments in partnerships, joint ventures, or other entities may involve risks not present were a third party not involved, including the possibility that our partners, co-tenants or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, our partners or co-venturers might at any time have economic or other business interests or goals, which are inconsistent with our business interests or goals. These investments may also have the

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to ~~PART~~exercise Isole decision-making authority regarding such property, partnership, joint venture or other entity. Investments in partnerships, joint ventures, or other entities may involve risks not present were a third party not involved, including the possibility that our partners, co-tenants or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, our partners or co-venturers might at any time have economic or other business interests or goals, which are inconsistent with our business interests or goals. These investments may also have the potential risk of impasses on decisions such as a sale, because neither we, nor the partner, co-tenant or co-venturer would have full control over the partnership or joint venture. Consequently, actions by such partner, co-tenant or co-venturer might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in specific circumstances be liable for the actions of our third-party partners, co-tenants or co-venturers. As of December 31, 2012, our unconsolidated joint ventures owned 56 properties and we had an aggregate cost basis in these joint ventures totaling approximately $1.0 billion. As of December 31, 2012, our share of unconsolidated joint venture debt, which is non-recourse to us, totaled approximately $1.9 billion. As of December 31, 2012, our share of unconsolidated joint venture debt, which is recourse to us, totaled approximately $218.4 million.

ITEM 1A. RISK FACTORS

potential risk of impasses on decisions such as a sale, because neither we, nor the partner, co-tenant or co-venturer would have full control over the partnership or joint venture. Consequently, actions by such partner, co-tenant or co-venturer might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in specific circumstances be liable for the actions of our third-party partners, co-tenants or co-venturers. As of December 31, 2011, our unconsolidated joint ventures owned 22 properties and we had an aggregate cost basis in these joint ventures totaling approximately $893.9 million. As of December 31, 2011, our share of unconsolidated joint venture debt, which is non-recourse to us, totaled approximately $1.8 billion.

Certain of our joint venture agreements contain terms in favor of our partners that could have an adverse effect on the value of our investments in the joint ventures.

Each of our joint venture agreements has been individually negotiated with our partner in the joint venture and, in some cases, we have agreed to terms that are more favorable to our partner in the joint venture than to us. For example, our partner may be entitled to a specified portion of the profits of the joint venture before we are entitled to any portion of such profits and our partner may have rights to buy our interest in the joint venture, to force us to buy the partner's interest in the joint venture or to compel the sale of the property owned by such joint venture. These rights may permit our partner in a particular joint venture to obtain a greater benefit from the value or profits of the joint venture than us, which could have an adverse effect on the value of our investment in the joint venture and on our financial condition and results of operations. We may also enter into similar arrangements in the future.

We may incur costs to comply with environmental laws.

We are subject to various federal, state and local environmental laws. These laws regulate our use, storage, disposal and management of hazardous substances and wastes and can impose liability on property owners or operators for the clean-up of certain hazardous substances released on a property and any associated damage to natural resources without regard to whether the release was legal or whether it was caused by the property owner or operator. The presence of hazardous substances on our properties may adversely affect occupancy and our ability to develop or sell or borrow against those properties. In addition to potential liability for clean-up costs, private plaintiffs may bring claims for personal injury, property damage or for similar reasons. Various laws also impose liability for the clean-up of contamination at any facility (e.g., a landfill) to which we have sent hazardous substances for treatment or disposal, without regard to whether the materials were transported, treated and disposed in accordance with law. Being held responsible for such a clean-up could result in significant cost to us and have a material adverse effect on our financial condition and results of operations.

We may incur significant costs complying with the Americans with Disabilities Act and other regulatory and legal requirements.

Our properties may be subject to risks relating to current or future laws including laws benefiting disabled persons, and other state or local zoning, construction or other regulations. These laws may require significant property modifications in the future, which could result in fines being levied against ~~us in the future. The occurrence of any of these events could have an adverse impact on our cash flows and ability to service debt and make distributions to SL Green.~~

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us ~~PART~~in Ithe future. The occurrence of any of these events could have an adverse impact on our cash flows and ability to service debt and make distributions to SL Green.

ITEM 1A. RISK FACTORS

Under the Americans with Disabilities Act, or ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Additional federal, state and local laws also may require modifications to our properties, or restrict our ability to renovate our properties. We have not conducted an audit or investigation of all of our properties to determine our compliance. If one or more of our properties is not in compliance with the ADA or other legislation, then we may be required to incur additional costs to bring the property into compliance with the ADA or similar state or local laws. We cannot predict the ultimate amount of the cost of compliance with ADA or other legislation. If we incur substantial costs to comply with the ADA and any other legislation, our financial condition, results of operations and cash flow and/or ability to satisfy our debt service obligations and to make distributions to SL Green could be adversely affected.

Limitations on our ability to sell or reduce the indebtedness on specific mortgaged properties could adversely affect us.

We acquired the property located at 609 Fifth Avenue, New York, New York in June 2006 and have agreed not to take certain action before January 2014 that would adversely affect the tax positions of certain of the partners who held interests in this property prior to the acquisition.

We acquired the properties located at 752 Madison Avenue, 762 Madison Avenue and 400 East 58^th Street New York, New York in January 2012 and have agreed not to take certain action before January 2019 that would adversely affect the tax positions of certain of the partners who held interests in these properties prior to the acquisition.

In connection with future acquisitions of interests in properties, we may agree to restrictions on our ability to sell or refinance the acquired properties. These limitations could have adverse consequences on our business and result in a material adverse effect on our financial condition and results of operations.

We face potential conflicts of interest.

There are potential conflicts of interest between SL Green and Mr. Green.

There is a potential conflict of interest relating to the disposition of certain property contributed to us by Stephen L. Green, and his family in SL Green's initial public offering. Mr. Green serves as the chairman of SL Green's board of directors and is an executive officer. As part of our formation, Mr. Green contributed appreciated property, with a net book value of $73.5 million, to ~~SLGOP~~us in exchange for our units of limited partnership interest ~~in SLGOP~~. He did not recognize any taxable gain as a result of the contribution. ~~SLGOP~~We, however, took a tax basis in the contributed property equal to that of the contributing unitholder. The fair market value of the property contributed by him ~~exceeded~~at our formation exceeded his tax basis ~~by approximately $34~~.~~0 million~~ ~~at the time of contribution.~~ The difference between fair market value and tax basis at the time of contribution represents a built-in gain which totaled $5.1 million at December 31, 2012. If we sell a property in a transaction in which a taxable gain is recognized, for tax purposes the built-in gain would be allocated solely to him and not to SL Green. As a result, Mr. Green has a conflict of interest if the sale of a property, he contributed, is in ~~our~~SL Green's best interest but not his.

There is a potential conflict of interest relating to the refinancing of indebtedness specifically allocated to Mr. Green. Mr. Green would recognize gain if he were to receive a distribution of cash from ~~SLGOP~~us in an amount that exceeds his tax basis in his partnership units. His tax basis includes his share of debt, including mortgage indebtedness, owed by ~~SLGOP~~us. If ~~SLGOP~~ we were to retire such debt, then he would experience a decrease in his share of liabilities, which, for tax purposes, would be treated as a ~~distribution of cash to him. To the extent the deemed distribution of cash exceeded his tax basis, he would recognize gain.~~

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distribution ~~PART~~of Icash to him. To the extent the deemed distribution of cash exceeded his tax basis, he would recognize gain.

~~ITEM~~Members 1Aof management may have a conflict of interest over whether to enforce terms of agreements with entities which Mr. ~~RISK~~ Green, ~~FACTORS~~directly or indirectly, has an affiliation.

Through ~~Members~~Alliance Building Services, or Alliance, First Quality Maintenance, L.P., or First Quality, provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of ~~management~~Stephen ~~may~~L. ~~have~~Green, the chairman of SL Green's board of directors. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a ~~conflict~~basis separately negotiated with any tenant seeking such additional services. Our company and our tenants accounted for approximately 28.7% of ~~interest~~Alliance's ~~over~~2012 ~~whether~~estimated total revenue. The contracts pursuant to ~~enforce~~which these services are provided are not the result of arm's length negotiations and, therefore, there can be no assurance that the terms and conditions are not less favorable than those which could be obtained from third parties providing comparable services. In addition, to the extent that we choose to enforce our rights under any of these agreements, ~~with~~we ~~entities~~may ~~which~~determine ~~senior~~to ~~management~~pursue available remedies, ~~directly~~such as actions for damages or ~~indirectly~~injunctive relief, ~~has~~less anvigorously than we otherwise might because of ~~affiliation~~our desire to maintain our ongoing relationship with Gary Green.

Through Alliance Building Services, or Alliance, First Quality Maintenance, L.P., provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of Stephen L. Green, the chairman of SL Green's board of directors. We and our tenants accounted for approximately 25.5% of Alliance's 2011 estimated total revenue. The contracts pursuant to which these services are provided are not the result of arm's length negotiations and, therefore, there can be no assurance that the terms and conditions are not less favorable than those which could be obtained from third parties providing comparable services. In addition, to the extent that we choose to enforce our rights under any of these agreements, we may determine to pursue available remedies, such as actions for damages or injunctive relief, less vigorously than we otherwise might because of our desire to maintain our ongoing relationship with Gary Green.

Members of management may have a conflict of interest over whether to enforce terms of senior management's employment and noncompetition agreements.

Stephen Green, Marc Holliday, Andrew Mathias, Andrew Levine and James Mead entered into employment and noncompetition agreements with SL Green pursuant to which they have agreed not to actively engage in the acquisition, development or operation of office real estate in the New York City Metropolitan area. For the most part, these restrictions apply to the executive both during his employment and for a period of time thereafter. Each executive is also prohibited from otherwise disrupting or interfering with our business through the solicitation of our employees or clients or otherwise. To the extent that SL Green chooses to enforce its rights under any of these agreements, SL Green may determine to pursue available remedies, such as actions for damages or injunctive relief, less vigorously than it otherwise might because of its desire to maintain an ongoing relationship with the individual involved. Additionally, the non-competition provisions of these agreements despite being limited in scope and duration, could be difficult to enforce, or may be subject to limited enforcement, should litigation arise over them in the future. Mr. Green also has interests in two properties in Manhattan, which are exempt from the non-competition provisions of his employment and non-competition agreement.

SL Green's failure to qualify as a REIT would be costly.

We believe that SL Green has operated in a manner to qualify as a REIT for federal income tax purposes and SL Green intends to continue to so operate. Many of ~~these~~the REIT compliance requirements, however, are highly technical and complex. The determination that SL Green is a REIT requires an analysis of factual matters and circumstances. These matters, some of which ~~may~~are not be totally within our or SL Green's control, can affect its qualification as a REIT. For example, to qualify as a REIT, at least 95% of SL Green's gross income must come from designated sources that are listed in the REIT tax laws. SL Green is also required to distribute to stockholders at least 90% of its REIT taxable income excluding capital gains. The fact that SL Green holds its assets through us and our subsidiaries further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize SL Green's REIT status. Furthermore, Congress and the Internal Revenue Service, ~~which~~or ~~we refer to as~~ the IRS, might make changes to the tax laws and regulations, and the courts might ~~issue new rulings that make it more difficult, or impossible, for SL Green to remain qualified as a REIT.~~

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issue ~~PART~~new Irulings that make it more difficult, or impossible, for SL Green to remain qualified as a REIT.

If SL Green ~~ITEM~~fails 1Ato qualify as a REIT, it would be subject to federal income tax at regular corporate rates. ~~RISK~~ ~~FACTORS~~Also, unless the IRS grants SL Green relief under specific statutory provisions, it would remain disqualified as a REIT for four years following the year it first failed to qualify. If SL Green failed to qualify as a REIT, we would have to pay significant income taxes and we would therefore have less money available for investments, to service indebtedness or make distributions to SL Green.

If SL Green fails to qualify as a REIT, it would be subject to federal income tax at regular corporate rates. Also, unless the IRS grants SL Green relief under specific statutory provisions, it would remain disqualified as a REIT for four years following the year it first failed to qualify. If SL Green failed to qualify as a REIT, we would have to pay significant income taxes and we would therefore have less money available to service indebtedness.

We are dependent on external sources of capital.

Because of distribution requirements imposed on us in order to allow SL Green to qualify as a REIT, it is not likely that we will be able to fund all future capital needs, including acquisitions, from income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. In addition, we anticipate having to raise money in the public equity and debt markets with some regularity and our ability to do so will depend upon the general conditions prevailing in these markets. At any time conditions may exist which effectively prevent SL Green and its subsidiaries, including us, or REITs in general, from accessing these markets. Moreover, additional equity offerings may result in substantial dilution of SL Green's stockholders' interests, and additional debt financing may substantially increase our leverage.

We face significant competition for tenants.

The leasing of real estate is highly competitive. The principal means of competition are rent, location, services provided and the nature and condition of the facility to be leased. We directly compete with all owners and developers of similar space in the areas in which our properties are located.

Our commercial office properties are concentrated in highly developed areas of midtown Manhattan and certain Suburban central business districts, or CBDs. Manhattan is the largest office market in the United States. The number of competitive office properties in Manhattan and CBDs in which our Suburban properties are located (which may be newer or better located than our properties) could have a material adverse effect on our ability to lease office space at our properties, and on the effective rents we are able to charge.

Loss of our key personnel could harm our operations.

We are dependent on the efforts of Marc Holliday, SL Green's chief executive officer, and Andrew Mathias, SL Green's president. These officers have employment agreements which expire in January ~~2013~~2014 and December 2013, respectively. A loss of the services of either of these individuals could adversely affect our operations.

Our business and operations would suffer in the event of system failures or cyber security attacks.

Despite system redundancy, the implementation of security measures and the existence of a Disaster Recovery Plan for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, telecommunication failures and cyber security attacks, such as computer viruses or unauthorized access. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions. Any compromise of our security could also result in a violation of applicable privacy and

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other ~~PART~~laws, Isignificant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.

ITEM 1A. RISK FACTORS

disruptions. Any compromise of our security could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.

Compliance with changing or new regulation applicable to corporate governance and public disclosure may result in additional expenses, affect our operations and affect our reputation.

Changing or new laws, regulations and standards relating to corporate governance and public disclosure, including SEC regulations and NYSE rules, can create uncertainty for public companies. These changed or new laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed. As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal controls over financial reporting and our external auditors' audit of that assessment have required the commitment of significant financial and managerial resources. In addition, it has become more difficult and expensive for SL Green to obtain director and officer liability insurance. We expect these efforts to require the continued commitment of significant resources. Further, SL Green's directors, chief executive officer and chief financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, SL Green may have difficulty attracting and retaining qualified directors and executive officers, which could harm our business.

As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal controls over financial reporting and our external auditors' audit of that assessment have required the commitment of significant financial and managerial resources. We expect these efforts to require the continued commitment of significant resources. Further, SL Green's directors, chief executive officer and chief financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, SL Green may have difficulty attracting and retaining qualified directors and executive officers, which could harm our business.

Forward-Looking Statements May Prove Inaccurate

See Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Forward-looking Information" for additional disclosure regarding forward-looking statements.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As of December 31, ~~2011~~2012, we did not have any unresolved comments with the staff of the SEC.

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PART I

ITEM 2. PROPERTIES

Our Portfolio

General

As of December 31, ~~2011~~2012, we owned or held interests in 2627 consolidated and 7nine unconsolidated commercial office properties encompassing approximately 18.43 million rentable square feet and approximately 65.29 million rentable square feet, respectively, ~~located~~for a total of 24.2 million square feet located primarily in midtown Manhattan. Certain of these properties include at least a small amount of retail space on the lower floors, as well as basement/storage space. As of December 31, ~~2011~~2012, our portfolio also included ownership interests in 25 consolidated and 6five unconsolidated commercial office properties located in Brooklyn, ~~Queens,~~ Long Island, Westchester County, Connecticut and ~~New~~Northern New Jersey encompassing approximately 3.9 million rentable square feet and approximately 21.95 million rentable square feet, respectively. We refer to these properties as our Suburban assets.

WeAs of December 31, 2012, we also owned investments in ~~nine~~15 stand-alone retail properties encompassing approximately ~~349~~473,~~282~~764 square feet, ~~seven~~16 development properties encompassing approximately 12,~~395~~617,~~838~~491 square feet, ~~and~~two ~~three~~residential properties encompassing 385 units (approximately 430,482 square feet), two land interests asand ~~of December~~ 31 west coast office properties encompassing approximately 4,473,603 ~~2011~~square feet. In addition, we manage ~~three~~two office properties owned by third parties and affiliated companies encompassing approximately ~~0.9 million~~ 626,415 rentable square feet. As of December 31, 2012, we also held debt and preferred equity investments with a book value of $1.4 billion.

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The following table sets forth certain information with respect to each of the Manhattan and Suburban office and retail properties in the portfolio as of December 31, 2012:

Manhattan Properties		SubMarket

CONSOLIDATED PROPERTIES
"Same Store"
100 Church Street	1959/2010	Downtown	1,047,500	4	81.8	32,332,824	3	15	38.23	34.45
120 West 45th Street	1998	Midtown	440,000	1	79.5	20,570,712	2	22	58.78	59.03
125 Park Avenue	1923/2006	Grand Central	604,245	2	73.1	27,111,432	2	18	61.77	58.77
220 East 42nd Street	1929	Grand Central	1,135,000	4	94.9	47,830,560	4	31	43.70	36.87
317 Madison Avenue	1920/2004	Grand Central	450,000	2	81.3	20,475,852	2	72	50.77	41.94
333 West 34th Street	1954/2000	Penn Station	345,400	1	100.0	14,551,572	1	3	43.07	35.77
420 Lexington Ave (Graybar)(5)	1927/1999	Grand Central North	1,188,000	4	92.5	65,446,140	6	226	49.83	38.44
461 Fifth Avenue(5)(6)	1988	Midtown	200,000	1	99.4	15,953,568	1	14	77.86	65.46
485 Lexington Avenue	1956/2006	Grand Central North	921,000	3	100.0	53,699,208	5	24	58.13	44.18
555 West 57th Street(6)	1971	Midtown West	941,000	3	99.2	33,682,356	3	11	33.97	31.47
609 Fifth Avenue	1925/1990	Rockefeller Center	160,000	1	85.2	13,487,388	1	9	101.57	90.93
625 Madison Avenue(5)	1956/2002	Plaza District	563,000	2	94.5	47,929,236	4	23	88.34	70.60
673 First Avenue(5)(6)	1928/1990	Grand Central South	422,000	1	100.0	20,578,332	2	8	45.93	38.84
711 Third Avenue(5)(6)(7)	1955	Grand Central North	524,000	2	86.3	25,843,632	2	16	52.65	46.21
750 Third Avenue	1958/2006	Grand Central North	780,000	3	97.5	41,119,548	4	31	52.98	46.84
810 Seventh Avenue	1970	Times Square	692,000	2	87.6	37,771,128	3	39	59.63	51.30
919 Third Avenue	1970	Grand Central North	1,454,000	5	96.9	86,011,788	4	13	61.01	46.35
1185 Avenue of the Americas(5)	1969	Rockefeller Center	1,062,000	4	97.6	76,003,644	7	19	72.33	64.00
1350 Avenue of the Americas	1966	Rockefeller Center	562,000	2	97.0	36,075,624	3	38	63.64	53.25
1 Madison Avenue	1960/2002	Park Avenue South	1,176,900	4	98.7	67,030,020	6	2	57.26	56.94
331 Madison Avenue	1923	Grand Central	114,900	0	84.2	4,238,796	0	16	44.00	43.44

Subtotal / Weighted Average			14,782,945	50	93.0	787,743,360	65	650

"Non Same Store"
51 East 42nd Street	1913	Grand Central	142,000	0	85.9	6,660,564	1	88	54.60	54.85
110 East 42nd Street	1921	Grand Central	205,000	1	81.6	8,102,136	1	20	48.34	40.88
180 Maiden Lane	1984	Financial East	1,090,000	4	97.7	52,681,692	2	5	50.19	46.35
304 Park Avenue South	1930	Midtown South	215,000	1	95.8	10,433,676	1	17	53.80	53.44
641 Sixth Avenue	1902	Midtown South	163,000	1	92.1	7,878,132	1	8	52.48	49.66
1515 Broadway	1972	Times Square	1,750,000	6	100.0	109,293,600	10	13	63.54	55.21

Subtotal / Weighted Average			3,565,000	12	97.0	195,049,800	15	151

Total / Weighted Average Manhattan Consolidated Properties(8)			18,347,945	62	93.8	982,793,160	79	801

UNCONSOLIDATED PROPERTIES
"Same Store"
100 Park Avenue—50%	1950/1980	Grand Central South	834,000	3	94.5	51,892,020	2	36	61.41	52.60
388 & 390 Greenwich Street—50.6%(12)	1986/1990	Downtown	2,635,000	9	100.0	107,986,128	5	1	40.99	40.98
600 Lexington Avenue—55%	1983/2009	Eastside	303,515	1	73.7	15,980,040	1	26	74.28	51.90
800 Third Avenue—42.95%	1972/2006	Grand Central North	526,000	2	87.1	26,362,608	1	35	54.64	47.26
1745 Broadway—32.3%	2003	Midtown	674,000	2	100.0	35,307,396	1	1	54.77	54.72

Subtotal / Weighted Average			4,972,515	17	96.1	237,528,192	10	99

"Non Same Store"
10 East 53rd Street—55%	1972		354,300	1	90.0	18,725,484	1	17	60.25	60.22
315 West 36th Street—35.5%	1926		147,619	0	99.2	3,763,464	0	6	27.25	27.25
521 Fifth Avenue—50.5%	1929/2000	Grand Central	460,000	2	85.2	22,424,688	1	41	54.80	54.96

Subtotal / Weighted Average			961,919	3	89.1	44,913,636	2	64

Total / Weighted Average Unconsolidated Properties(9)			5,934,434	20	95.0	282,441,828	12	163

Manhattan Grand Total / Weighted Average			24,282,379	82	94.1	1,265,234,988		964

Manhattan Grand Total—SLG share of Annualized Rent						1,049,312,825	91

Manhattan Same Store Occupancy %—Combined			19,755,460	81	93.8

~~The following~~Table ~~table sets forth certain information with respect to each~~ of ~~the Manhattan and Suburban office and retail properties in the portfolio as of December 31, 2011:~~ Contents

Manhattan Properties	Year Built/ Renovated		SubMarket	Approximate Rentable Square Feet		Percentage of Portfolio Rentable Square Feet (%)		Percent Leased (%)		Annualized Cash Rent ($'s)(1)		Percentage of Portfolio Annualized Cash Rent (%)(2)		Number of Tenants		Annualized Cash Rent per Leased Square Foot ($)(3)		Annualized Net Effective Cash Rent per Leased Square Foot ($)(4)
Suburban Properties	Year Built / Renovated		SubMarket	Approximate Rentable Square Feet		Percentage of Portfolio Rentable Square Feet (%)		Percent Leased (%)		Annualized Cash Rent ($'s)(1)		Percentage of Portfolio Annualized Cash Rent (%)(2)		Number of Tenants		Annualized Cash Rent per Leased Square Foot ($)(3)		Annualized Net Effective Cash Rent per Leased Square Foot ($)(4)
CONSOLIDATED PROPERTIES
"Same Store"
"Same Store" Westchester, NY
100 Church Street		1959/2010	Downtown		1,047,500		3		70.9		27,249,372		2		13		37.33		37.06
1100 King Street		1983-1986	Rye Brook, Westchester		540,000		2		65.9		10,433,580		1		23		28.86		24.20
120 West 45th Street		1998	Midtown		440,000		1		84.3		22,021,056		2		25		58.43		59.71
520 White Plains Road		1979	Tarrytown, Westchester		180,000		1		72.5		3,671,304		0		8		28.93		22.12
220 East 42nd Street		1929	Grand Central		1,135,000		4		95.2		47,646,300		4		31		43.46		34.79
115-117 Stevens Avenue		1984	Valhalla, Westchester		178,000		1		86.0		2,577,300		0		11		22.88		17.54
317 Madison Avenue		1920/2004	Grand Central		450,000		1		85.6		21,413,532		2		81		50.39		42.09
100 Summit Lake Drive		1988	Valhalla, Westchester		250,000		1		70.7		4,065,456		0		10		23.00		18.74
333 West 34th Street		1954/2000	Penn Station		345,400		1		90.2		12,904,176		1		3		40.70		38.62
200 Summit Lake Drive		1990	Valhalla, Westchester		245,000		1		87.5		5,218,368		0		7		24.81		22.21
420 Lexington Ave (Graybar)(5)		1927/1999	Grand Central North		1,188,000		4		90.3		59,331,852		5		218		49.35		40.80
500 Summit Lake Drive		1986	Valhalla, Westchester		228,000		1		76.9		3,982,824		1		6		24.62		21.75
461 Fifth Avenue(5)(6)		1988	Midtown		200,000		1		98.8		15,236,376		1		16		76.96		68.64
140 Grand Street		1991	White Plains, Westchester		130,100		0		95.3		4,112,952		0		12		36.74		23.29
485 Lexington Avenue		1956/2006	Grand Central North		921,000		3		90.8		47,281,632		4		21		56.57		44.76
360 Hamilton Avenue		2000	White Plains, Westchester		384,000		1		94.3		13,288,356		1		16		36.72		29.73
555 West 57th Street(6)		1971	Midtown West		941,000		3		99.2		32,135,868		3		11		32.59		32.06
Westchester, NY Subtotal/Weighted Average					2,135,100		8		79.2		47,350,140		5		93
609 Fifth Avenue		1925/1990	Rockefeller Center		160,000		1		84.7		13,232,748		1		9		97.52		88.68
"Same Store" Connecticut
625 Madison Avenue(5)		1956/2002	Plaza District		563,000		2		94.6		42,182,353		4		24		77.69		69.55
Landmark Square		1973-1984	Stamford, Connecticut		826,000		3		83.8		19,364,928		2		106		32.68		26.80
673 First Avenue(5)(6)		1928/1990	Grand Central South		422,000		1		99.7		18,591,432		2		9		41.51		39.14
680 Washington Boulevard		1989	Stamford, Connecticut		133,000		0		74.6		4,083,912		0		7		41.67		35.86
711 Third Avenue(5)(6)(7)		1955	Grand Central North		524,000		2		94.8		27,602,868		2		18		51.15		43.53
750 Washington Boulevard		1989	Stamford, Connecticut		192,000		1		93.6		7,332,120		0		9		41.61		32.94
750 Third Avenue		1958/2006	Grand Central North		780,000		2		97.1		39,846,708		3		31		52.00		44.87
1055 Washington Boulevard(5)		1987	Stamford, Connecticut		182,000		1		86.0		5,680,620		0		21		35.60		29.76
810 Seventh Avenue		1970	Times Square		692,000		2		86.4		40,238,592		4		40		59.70		47.21
300 Main Street		2002	Stamford, Connecticut		130,000		0		86.4		1,503,192		0		20		14.09		12.42
919 Third Avenue		1970	Grand Central North		1,454,000		5		99.9		87,346,332		4		14		60.13		50.54
1010 Washington Boulevard		1988	Stamford, Connecticut		143,400		0		60.9		2,801,568		0		17		34.34		25.34
1185 Avenue of the Americas(5)		1969	Rockefeller Center		1,062,000		3		99.9		75,492,684		7		19		70.03		62.77
500 West Putnam Avenue		1973	Greenwich, Connecticut		121,500		0		55.1		2,920,224		0		10		43.49		38.17
1350 Avenue of the Americas		1966	Rockefeller Center		562,000		2		90.0		32,582,868		3		40		61.84		53.62
Connecticut Subtotal/Weighted Average					1,727,900		5		80.7		43,686,564		3		190
1 Madison Avenue		1960/2002	Park Avenue South		1,176,900		4		99.8		67,536,096		6		2		57.10		56.66
Total / Weighted Average Consolidated Properties(10)					3,863,000		13		79.9		91,036,704		8		283
331 Madison Avenue		1923	Grand Central		114,900		0		96.9		4,947,864		0		17		44.76		40.90
Subtotal / Weighted Average					14,178,700		45		92.9		734,820,709		60		642
"Non Same Store"
51 East 42nd Street		1913	Grand Central		142,000		0		95.5		6,978,300		1		90		51.75		52.29
110 East 42nd Street		1921	Grand Central		205,000		1		69.9		6,682,056		1		19		46.58		37.44
125 Park Avenue		1923/2006	Grand Central		604,245		2		70.0		24,657,036		2		17		58.89		65.07
180 Maiden Lane		1984	Financial East		1,090,000		3		97.7		52,810,680		2		5		50.31		40.65
521 Fifth Avenue		1929/2000	Grand Central		460,000		1		90.9		23,224,260		2		47		53.56		51.61
1515 Broadway		1972	Times Square		1,750,000		6		100.0		107,373,252		9		13		62.43		53.46
Subtotal / Weighted Average					4,251,245		14		92.5		221,725,584		17		191
Total / Weighted Average Manhattan Consolidated Properties(8)					18,429,945		59		92.8		956,546,293		77		833
UNCONSOLIDATED PROPERTIES
"Same Store"
100 Park Avenue—50%		1950/1980	Grand Central South		834,000		3		95.0		51,129,624		2		35		60.76		52.41
The Meadows—50%		1981	Rutherford, New Jersey		582,100		2		79.7		12,653,352		1		51		28.51		25.19
800 Third Avenue—42.95%		1972/2006	Grand Central North		526,000		2		84.3		25,080,396		1		36		53.86		49.87
16 Court Street—35%		1928	Brooklyn, NY		317,600		1		84.0		9,626,952		0		66		39.07		34.86
388 & 390 Greenwich Street—50.6%(12)		1986/1990	Downtown		2,635,000		8		100.0		104,501,052		5		1		39.66		39.66
Jericho Plaza—20.26%		1980	Jericho, New York		640,000		2		89.6		20,197,140		0		35		36.18		31.88
1745 Broadway—32.3%		2003	Midtown		674,000		2		100.0		34,761,204		1		1		53.93		53.93
Total / Weighted Average Unconsolidated Properties(11)					1,539,700		5		84.7		42,477,444		1		152
Subtotal / Weighted Average					4,669,000		15		97.3		215,472,276		9		73
Suburban Grand Total / Weighted Average					5,402,700		18		81.3		133,514,148				435
"Non Same Store"
Suburban Grand Total—SLG share of Annualized Rent											99,230,898		9
280 Park Avenue—49.5%		1961	Park Avenue		1,219,158		4		74.5		71,915,628		3		33		83.87		68.26
Suburban Same Store Occupancy %—Combined					5,402,700		100		81.3
600 Lexington Avenue—55%		1983/2009	Eastside		303,515		1		72.6		14,216,808		1		23		69.58		62.36
Portfolio Grand Total					29,685,079		100				1,398,749,136
Subtotal / Weighted Average					1,522,673		5		74.1		86,132,436		4		56
Portfolio Grand Total—SLG Share of Annualized Rent											1,148,543,723		100
Total / Weighted Average Unconsolidated Properties(9)					6,191,673		20		91.6		301,604,712		13		129
RETAIL
Manhattan Grand Total / Weighted Average					24,621,618		78		92.5		1,258,151,005				962
"Same Store" Retail
Manhattan Grand Total—SLG share of Annualized Rent											1,031,117,133		90
1604 Broadway—63%		1912/2001	Times Square		29,876		6		23.7		2,001,902		4		2		212.55		190.55
Manhattan Same Store Occupancy %—Combined					18,847,700		77		94.0
11 West 34th Street—30%		1920/2010	Herald Square/Penn Station		17,150		4		100.0		2,231,736		2		1		200.16		191.90
21-25 West 34th Street—50%		2009	Herald Square/Penn Station		30,100		6		100.0		7,866,780		13		1		391.36		342.19
27-29 West 34th Street—50%		2009	Herald Square/Penn Station		15,600		3		100.0		4,636,224		8		2		296.95		289.54
717 Fifth Avenue—10.92%		1958/2000	Midtown/Plaza District		119,550		25		89.4		34,271,976		12		7		309.02		279.77
Williamsburg Terrace		2010	Brooklyn, NY		52,000		11		100.0		1,552,560		5		3		29.84		32.21
Subtotal/Weighted Average					264,276		56		86.6		52,561,178		44		16
"Non Same Store" Retail
19-21 East 65th Street—80%		1928-1940	Plaza District		23,610		5		100.0		1,460,108		4		7		109.34		109.34
21 East 66th Street—32.28%		1921	Plaza District		16,736		4		100.0		3,282,000		3		1		251.13		251.13
44 West 55th Street—80%		1920	Plaza District		8,557		2		18.8		160,680		0		1		99.93		99.93
131-137 Spring Street		1891	Soho		68,342		14		100.0		5,002,596		16		12		73.20		73.20
724 Fifth Avenue—50%		1921	Plaza District		65,010		14		84.7		12,279,960		20		8		220.23		220.23
752 Madison Avenue—80%		1996/2012	Plaza District		21,124		4		100.0		3,189,324		8		1		150.98		150.98
762 Madison Avenue—80%		1910	Plaza District		6,109		1		100.0		1,296,192		3		5		212.18		212.18
Subtotal/Weighted Average					209,488		44		91.9		26,670,860		56		35
Total / Weighted Average Retail Properties					473,764		100		89.0		79,232,038		100		51

Suburban Properties		SubMarket				Annualized Cash Rent ($'s)(1)
CONSOLIDATED PROPERTIES
"Same Store" Westchester, NY
1100 King Street	1983-1986	Rye Brook, Westchester	540,000	2	75.4		10,868,568	1	26	28.42	23.05
520 White Plains Road	1979	Tarrytown, Westchester	180,000	1	73.6		3,654,936	0	9	28.34	22.45
115-117 Stevens Avenue	1984	Valhalla, Westchester	178,000	1	85.5		3,186,120	0	13	23.37	14.67
100 Summit Lake Drive	1988	Valhalla, Westchester	250,000	1	61.2		2,808,780	0	8	18.37	20.18
200 Summit Lake Drive	1990	Valhalla, Westchester	245,000	1	87.5		6,348,204	1	7	30.18	27.88
500 Summit Lake Drive	1986	Valhalla, Westchester	228,000	1	78.1		4,105,068	1	7	24.92	21.83
140 Grand Street	1991	White Plains, Westchester	130,100	0	93.6		4,004,304	0	10	36.47	28.41
360 Hamilton Avenue	2000	White Plains, Westchester	384,000	1	94.3		13,043,124	1	16	35.57	29.98
Westchester, NY Subtotal/Weighted Average			2,135,100	8	80.6	$	48,019,104	5	96
"Same Store" Connecticut
Landmark Square	1973-1984	Stamford, Connecticut	826,000	3	82.6		18,359,388	2	99	31.14	27.72
680 Washington Boulevard	1989	Stamford, Connecticut	133,000	0	88.5		4,001,172	0	7	40.83	36.28
750 Washington Boulevard	1989	Stamford, Connecticut	192,000	1	93.6		7,127,976	0	9	40.46	33.98
1055 Washington Boulevard(5)	1987	Stamford, Connecticut	182,000	1	84.5		5,800,368	1	21	35.66	33.56
300 Main Street	2002	Stamford, Connecticut	130,000	0	88.8		1,773,252	0	18	15.83	13.65
1010 Washington Boulevard	1988	Stamford, Connecticut	143,400	0	53.3		2,214,900	0	15	30.95	24.94
500 West Putnam Avenue	1973	Greenwich, Connecticut	121,500	0	51.3		2,678,124	0	9	43.00	43.52
Connecticut Subtotal/Weighted Average			1,727,900	4	80.3		41,955,180	3	178
Total / Weighted Average Consolidated Properties(10)			3,863,000	12	80.5		89,974,284	8	274
UNCONSOLIDATED PROPERTIES
"Same Store"
One Court Square—30%	1987	Long Island City, New York	1,402,000	4	100.0		39,819,192	1	1	28.41	28.41
The Meadows—50%	1981	Rutherford, New Jersey	582,100	2	79.0		11,685,804	1	49	26.66	25.34
16 Court Street—35%	1928	Brooklyn, NY	317,600	1	90.3		10,340,508	0	66	40.23	34.77
Jericho Plaza—20.26%	1980	Jericho, New York	640,000	2	95.2		21,554,064	0	33	37.12	30.58
Total / Weighted Average Unconsolidated Properties(11)			2,941,700	9	93.8		83,399,568	2	149
Suburban Grand Total / Weighted Average			6,804,700	22	86.2		173,373,852		423
Suburban Grand Total—SLG share of Annualized Rent							110,295,692	10
Suburban Same Store Occupancy %—Combined			6,804,700	100	86.2
Portfolio Grand Total			31,426,318	100			1,431,524,857
Portfolio Grand Total—SLG Share of Annualized Rent							1,141,412,826	100

Table of Contents

Suburban Properties		SubMarket	Approximate Rentable Square Feet		Percentage of Portfolio Rentable Square Feet (%)		Percent Leased (%)		Annualized Cash Rent ($'s)(1)		Percentage of Portfolio Annualized Cash Rent (%)(2)

DEVELOPMENT
125 Chubb Way	2008	Lyndhurst, NJ		278,000		11		57.1		3,562,656		8	4	22.50	17.89
150 Grand Street	1962/2001	White Plains, NY		85,000		3		33.0		674,868		1	16	21.87	16.39
7 Renaissance Square—50%	2008	White Plains, NY		65,641		3		29.2		617,004		1	2	31.64	30.13
180-182 Broadway—25.5%	1902/2011	Cast Iron / Soho		156,086		6		—		—		—	—	—	—
33 Beekman Street—45.9%	2008	Downtown		—		—		—		—		—	—	—	—
7 Landmark Square	2000	Stamford, Connecticut		36,800		1		10.8		313,536		1	1	78.78	77.42
3 Columbus Circle—48.9%	1927/2010	Columbus Circle		530,981		20		51.6		23,437,454		25	18	85.37	72.00
280 Park Avenue—49.5%	1961	Park Avenue		1,219,158		47		55.0		59,163,552		64	30	85.10	83.89
635 Sixth Avenue	1902	Midtown South		104,000		4		—		—		—	—	—	—
747 Madison Avenue—33.33%	1962	Plaza District		10,000		0		—		—		—	—	—	—
985-987 Third Avenue	1900/1972	Upper East Side		13,678		1		—		—		—	—	—	—
1080 Amsterdam—87.5%	1932	Upper West Side		82,250		3		2.2		146,475		0	1	81.38	81.38
1552-1560 Broadway—50%	1926	Times Square		35,897		1		23.3		—		—	1	—	—

Total / Weighted Average Development Properties				2,617,491		100		44.5		87,915,545		100	73

LAND
2 Herald Square		Herald Square/Penn Station		354,400		37		100.0		11,250,000		42		25.40	25.40
885 Third Avenue		Midtown/Plaza District		607,000		63		100.0		15,850,000		58		18.28	18.28

Total / Weighted Average Land				961,400		100		100.0		27,100,000		100

West Coast
West Coast Office Portfolio—27.63%	various			4,473,603		100		76.9		94,707,029		100

Total / Weighted Average California Properties				4,473,603		100		76.9		94,707,029		100

RESIDENTIAL			Useable Sq. Feet		Total Units		Percent Leased (%)		Annualized Cash Rent ($'s)(1)		Average Monthly Rent Per Unit ($'s)
400 East 57th Street—80%	1931	Upper East Side		290,482		260		91.9		9,411,103		2,715
400 East 58th Street—80%	1929	Upper East Side		140,000		125		97.6		4,623,280		2,883

Total / Weighted Average Residential Properties				430,482		385		93.8		14,034,383		2,770

(1): Annualized Cash Rent represents the monthly contractual rent under existing leases as of December 31, 2012 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2012 for the 12 months ending December 31, 2013 are reductions of approximately $8.7 million for our consolidated properties and approximately $13.4 million for our unconsolidated properties.
(2): Includes our share of unconsolidated joint venture annualized cash rent calculated on a consistent basis.
(3): Annualized Rent Per Leased Square Foot represents Annualized Rent, as described in footnote (1) above, presented on a per leased square foot basis.
(4): Annual Net Effective Cash Rent Per Leased Square Foot represents (a) for leases in effect at the time an interest in the relevant property was first acquired by us, the remaining lease payments under the lease from the acquisition date divided by the number of months remaining under the lease multiplied by 12 and (b) for leases entered into after an interest in the relevant property was first acquired by us, all lease payments under the lease divided by the number of months in the lease multiplied by 12, minus, in the case of both (a) and (b), tenant improvement costs and leasing commissions, if any, paid or payable by us and presented on a per leased square foot basis. Annual Net Effective Cash Rent per Leased Square Foot includes future contractual increases in rental payments and therefore, in certain cases, may exceed Annualized Cash Rent per Leased Square Foot.
(5): We hold a leasehold interest in this property.
(6): Includes a parking garage.
(7): We hold a leasehold mortgage interest, a net sub-leasehold interest and a co-tenancy interest in this property.
(8): Includes approximately 16.8 million square feet of rentable office space, 1.2 million square feet of rentable retail space and 0.4 million square feet of garage space.
(9): Includes approximately 5.8 million square feet of rentable office space, 0.2 million square feet of rentable retail space and no garage space.
(10): Includes approximately 3.6 million square feet of rentable office space and 0.2 million square feet of rentable retail space.
(11): Includes approximately 1.5 million square feet of rentable office space and 0.1 million square feet of rentable retail space.
(12): The rent per square foot is presented on a triple-net basis.

		SubMarket
RETAIL
141 Fifth Avenue—50%	1879	Flatiron	13,000	4	100.0	2,605,440	5	2	249.73	237.88
747 Madison Avenue—33.33%	1962	Plaza District	10,000	3	100.0	5,004,000	7	1	501.05	501.05
1604 Broadway—63%	1912/2001	Times Square	29,876	9	23.7	2,001,902	5	2	283.28	188.14
11 West 34th Street—30%	1920/2010	Herald Square/Penn Station	17,150	5	100.0	1,802,500	2	1	161.66	197.63
21-25 West 34th Street—50%	2009	Herald Square/Penn Station	30,100	9	100.0	6,845,232	14	1	340.54	317.57
27-29 West 34th Street—50%	2009	Herald Square/Penn Station	15,600	4	100.0	4,242,720	9	2	271.74	282.88
379 West Broadway—45%	1853/1987	Cast Iron/Soho	62,006	18	100.0	3,512,880	6	5	58.03	54.41
717 Fifth Avenue—32.75%	1958/2000	Midtown/Plaza District	119,550	34	89.4	33,579,792	45	7	302.78	152.01
Williamsburg Terrace(6)	2010	Brooklyn, NY	52,000	15	100.0	1,575,069	6	3	30.27	34.91
Total / Weighted Average Retail Properties			349,282	100	89.9	61,169,535	100	24
DEVELOPMENT
3 Columbus Circle—48.9%	1927/2010	Columbus Circle	741,500	53	16.8	12,399,200	69	26	101.61	113.76
125 Chubb Way	2008	Lyndhurst, NJ	278,000	20	32.1	1,918,123	22	2	21.50	21.00
150 Grand Street	1962/2001	White Plains, NY	85,000	6	26.0	527,160	6	14	21.03	17.05
1552-1560 Broadway—50%	1926	Times Square	35,897	3	59.7	—	—	2	—	—
7 Renaissance Square—50%	2008	White Plains, NY	65,641	5	—	—	—	—	—	—
180-182 Broadway—25.5%	1902/2011	Cast Iron/Soho	153,000	11	—	—	—	—	—	—
7 Landmark Square	2000	Stamford, Connecticut	36,800	3	10.8	287,664	3	1	72.28	72.28
Total / Weighted Average Development Properties			1,395,838	100	18.7	15,132,147	100	45
LAND
2 Herald Square		Herald Square/Penn Station	354,400	30	100.0	9,000,000	39		25.40	25.40
885 Third Avenue		Midtown/Plaza District	607,000	52	100.0	11,095,000	48		18.28	18.28
292 Madison Avenue		Grand Central South	203,800	17	100.0	3,150,000	14		15.46	15.46
Total / Weighted Average Land			1,165,200	100	100.0	23,245,000	100
Portfolio Grand Total			31,426,318	100	91.2	1,431,524,857		1,385
Portfolio Grand Total—SLG Share of Annualized Rent						1,141,412,826	100

(1)Annualized Cash Rent represents the monthly contractual rent under existing leases as of December 31, 2011 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2011 for the 12 months ending December 31, 2012 are reductions of approximately $8.7 million for our consolidated properties and approximately $14.4 million for our unconsolidated properties. (2)Includes our share of unconsolidated joint venture annualized cash rent calculated on a consistent basis. (3)Annualized Rent Per Leased Square Foot represents Annualized Rent, as described in footnote (1) above, presented on a per leased square foot basis. (4)Annual Net Effective Cash Rent Per Leased Square Foot represents (a) for leases in effect at the time an interest in the relevant property was first acquired by us, the remaining lease payments under the lease from the acquisition date divided by the number of months remaining under the lease multiplied by 12 and (b) for leases entered into after an interest in the relevant property was first acquired by us, all lease payments under the lease divided by the number of months in the lease multiplied by 12, minus, in the case of both (a) and (b), tenant improvement costs and leasing commissions, if any, paid or payable by us and presented on a per leased square foot basis. Annual Net Effective Cash Rent per Leased Square Foot includes future contractual increases in rental payments and therefore, in certain cases, may exceed Annualized Cash Rent per Leased Square Foot. (5)We hold a leasehold interest in this property. (6)Includes a parking garage. (7)We hold a leasehold mortgage interest, a net sub-leasehold interest and a co-tenancy interest in this property. (8)Includes approximately 16.9 million square feet of rentable office space, 1.2 million square feet of rentable retail space and 0.4 million square feet of garage space. (9)Includes approximately 6.1 million square feet of rentable office space, 0.1 million square feet of rentable retail space and no garage space. (10)Includes approximately 3.6 million square feet of rentable office space and 0.2 million square feet of rentable retail space. (11)Includes approximately 2.9 million square feet of rentable office space. (12)The rent per square foot is presented on a triple-net basis.

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Historical Occupancy

We have historically achieved consistently higher occupancy rates in our Manhattan portfolio in comparison to the overall midtown markets, as shown over the last five years in the following table:


December 31, 2012	94.1	%	89.1	%	90.0	%
December 31, 2011	92.5	%	89.7	%	91.3	%
December 31, 2010	92.9	%	88.6	%	90.9	%
December 31, 2009	95.0	%	86.8	%	90.3	%
December 31, 2008	96.7	%	90.8	%	92.1	%
December 31, 2007	96.6	%	94.1	%	93.5	%

(1): Includes space for leases that were executed as of the relevant date in our wholly-owned and joint venture properties in Manhattan owned by us as of that date.
(2): Includes vacant space available for direct lease and sublease. Source: Cushman & Wakefield.
(3): The term "Class B" is generally used in the Manhattan office market to describe office properties that are more than 25 years old but that are in good physical condition, enjoy widespread acceptance by high-quality tenants and are situated in desirable locations in Manhattan. Class B office properties can be distinguished from Class A properties in that Class A properties are generally newer properties with higher finishes and frequently obtain the highest rental rates within their markets.

We have historically achieved consistently higher occupancy rates in our Westchester County and Connecticut portfolios in comparison to the overall Westchester County and Stamford, Connecticut, CBD markets, as shown over the last five years in the following table:


December 31, 2012	79.2	%	78.5	%	80.7	%	73.7	%
December 31, 2011	80.6	%	80.1	%	80.3	%	73.8	%
December 31, 2010	80.0	%	80.3	%	84.3	%	77.6	%
December 31, 2009	86.5	%	80.3	%	82.7	%	77.5	%
December 31, 2008	88.9	%	81.7	%	84.9	%	84.5	%
December 31, 2007	90.2	%	83.4	%	88.5	%	86.6	%

(1)Includes space for leases that were executed as of the relevant date in our wholly-owned and joint venture ~~Suburban~~ properties in Manhattan owned by us as of that date. (2)Includes vacant space available for direct lease and sublease. Source: Cushman & Wakefield.

Lease Expirations

Leases in our Manhattan portfolio, as at many other Manhattan office properties, typically have an initial term of seven to fifteen years, compared to typical lease terms of five to ten years in other large U.S. office markets. For the five years ending December 31, ~~2016~~2017, the average annual rollover at our Manhattan consolidated and unconsolidated office properties is expected to be approximately 1.2 million square feet and 0.4 million square feet, respectively, representing an average annual expiration rate of 8.0% and 3.7%, respectively, per year (assuming no tenants exercise renewal or cancellation options and there are no tenant bankruptcies or other tenant defaults).

~~The following tables set forth a schedule of the annual lease expirations at our Manhattan consolidated and unconsolidated office properties, respectively, with respect to leases in place as of~~ 28

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1.3 million square feet and 0.2 million square feet, respectively, representing an average annual expiration rate of 7.5% and 3.9%, respectively, per year (assuming no tenants exercise renewal or cancellation options and there are no tenant bankruptcies or other tenant defaults).

The following tables set forth a schedule of the annual lease expirations at our Manhattan consolidated and unconsolidated office properties, respectively, with respect to leases in place as of December 31, 2012 for each of the next ten years and thereafter (assuming that no tenants exercise renewal or cancellation options and that there are no tenant bankruptcies or other tenant defaults):

Manhattan Consolidated Office Properties Year of Lease Expiration					Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)

2013(3)	145	1,041,042	5.91	%	$	64,940,535	$	62.38
2014	122	1,725,995	9.79			95,047,120		55.07
2015	133	802,686	4.55			40,648,976		50.64
2016	89	1,198,931	6.80			67,584,297		56.37
2017	110	1,847,086	10.48			101,676,686		55.05
2018	36	651,362	3.70			48,309,139		74.17
2019	25	741,129	4.20			44,891,190		60.57
2020	39	2,235,931	12.69			129,560,220		57.94
2021	42	2,225,315	12.63			116,256,979		52.24
2022 & thereafter	87	5,156,222	29.25			273,878,018		53.12

Total/weighted average	828	17,625,699	100.00	%	$	982,793,160	$	55.76

(1): Annualized Cash Rent of Expiring Leases represents the monthly contractual rent under existing leases as of December 31, 2012 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2012 for the 12 months ending December 31, 2013, are reductions of approximately $6.0 million for the properties.
(2): Annualized Cash Rent Per Leased Square Foot of Expiring Leases represents Annualized Cash Rent of Expiring Leases, as described in footnote (1) above, presented on a per leased square foot basis.
(3): Includes 73,538 square feet occupied by month-to-month holdover tenants whose leases expired prior to December 31, 2012.

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December 31, 2011 for each of the next ten years and thereafter (assuming that no tenants exercise renewal or cancellation options and that there are no tenant bankruptcies or other tenant defaults):

Manhattan Unconsolidated Office Properties Year of Lease Expiration						Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)

2013	12		85,544	1.51	%	$	4,488,852	$	52.47
2014	27		439,838	7.74			22,881,600		52.02
2015	84		225,839	3.98			12,396,288		54.89
2016	21		192,438	3.39			10,683,420		55.52
2017	14		171,220	3.01			10,476,432		61.19
2018	21		473,771	8.34			29,029,765		61.27
2019	5		144,238	2.54			10,100,352		70.03
2020	11		235,433	4.14			11,404,693		48.44
2021	7		127,019	2.24			5,786,256		45.55
2022 & thereafter	26		949,965	16.72			57,208,042		60.22

Sub-Total/weighted average	228		3,045,305	53.61			174,455,700	$	57.29

	2	(3)	2,634,670	46.39			107,986,128

Total	230		5,679,975	100.00	%	$	282,441,828

Manhattan Consolidated Office Properties Year of Lease Expiration					Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)
2012(3)	141	725,151	4.13	%	$	39,192,552	$	54.05
2013	139	1,317,740	7.52			72,295,932		54.86
2014	116	1,754,020	10.01			96,140,449		54.81
2015	109	2,035,591	11.62			116,424,113		57.19
2016	82	1,173,761	6.70			65,446,008		55.76
2017	69	1,714,108	9.78			92,750,703		54.11
2018	35	598,396	3.41			45,272,673		75.66
2019	21	650,053	3.71			37,226,640		57.27
2020	41	2,305,420	13.16			130,997,232		56.82
2021 & thereafter	106	5,250,558	29.96			260,799,991		49.67
Total/weighted average	859	17,524,798	100.00	%	$	956,546,293	$	54.58

(1): Annualized Cash Rent of Expiring Leases represents the monthly contractual rent under existing leases as of December 31, 2012 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2012 for the 12 months ending December 31, 2013 are reductions of approximately $7.4 million for the joint venture properties.
(2): Annualized Cash Rent Per Leased Square Foot of Expiring Leases represents Annualized Cash Rent of Expiring Leases, as described in footnote (1) above, presented on a per leased square foot basis.
(3): Represents Citigroup's 13-year net lease at 388-390 Greenwich Street. The current net rent is $40.99 per square foot with annual CPI escalation.

Leases in ~~(1)Annualized Cash~~our ~~Rent~~Suburban ofportfolio, ~~Expiring~~as ~~Leases~~at ~~represents~~many ~~the~~other ~~monthly~~suburban ~~contractual~~office ~~rent~~properties, ~~under~~typically ~~existing~~have ~~leases~~an asinitial term of ~~December 31,~~five ~~2011 multiplied~~to byten 12years. ~~This~~For ~~amount~~the ~~reflects~~five ~~total~~years ~~rent~~ending ~~before~~December 31, ~~any rent abatements and includes expense reimbursements~~2017, the ~~which~~average ~~may~~annual berollover ~~estimated~~at asour ofSuburban ~~such~~consolidated ~~date.~~and ~~Total~~unconsolidated ~~rent~~office ~~abatements~~properties ~~for~~is ~~leases~~expected into ~~effect~~be ~~as of~~approximately ~~December~~0.3 ~~31,~~million ~~2011~~square ~~for~~feet ~~the~~and ~~12 months ending December 31, 2012, are reductions of approximately $6~~0.12 million ~~for~~square ~~the properties.~~feet, ~~(2)Annualized Cash~~respectively, ~~Rent~~representing ~~Per~~an ~~Leased~~average ~~Square~~annual ~~Foot~~expiration ofrate ~~Expiring Leases represents Annualized Cash Rent~~ of ~~Expiring~~11.3% ~~Leases,~~and as13.9% ~~described in footnote (1) above~~respectively, ~~presented on a~~ per ~~leased~~year ~~square foot basis.~~ (~~3)Includes 99,177~~assuming ~~square~~no ~~feet~~tenants ~~occupied~~exercise byrenewal ~~month-to-month~~or ~~holdover~~cancellation ~~tenants~~options ~~whose~~and ~~leases~~there ~~expired~~are ~~prior~~no totenant ~~December 31,~~bankruptcies ~~2011.~~or other tenant defaults).

Manhattan Unconsolidated Office Properties Year of Lease Expiration						Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)
2012(3)	20		396,873	7.03	%	$	28,229,555	$	71.13
2013	6		56,611	1.00			3,509,544		61.99
2014	15		288,372	5.11			20,647,080		71.60
2015	16		163,115	2.89			8,746,488		53.62
2016	13		149,576	2.65			9,069,720		60.64
2017	12		184,154	3.26			13,932,660		75.66
2018	20		873,771	15.47			56,815,416		65.02
2019	8		229,599	4.06			17,057,400		74.29
2020	6		166,996	2.96			8,630,172		51.68
2021 & thereafter	17		504,569	8.93			30,465,625		60.38
Sub-Total/weighted average	133		3,013,636	53.36			197,103,660	$	65.40
	2	(4)	2,634,670	46.64			104,501,052
Total	135		5,648,306	100.00	%	$	301,604,712

The following tables set forth a schedule of the annual lease expirations at our Suburban consolidated and unconsolidated office properties, respectively, with respect to leases in place as of

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~~which may be estimated as of such date. Total rent abatements for leases in effect as of~~ December 31, 2012 ~~2011~~ for ~~the~~each ~~12 months ending December 31, 2012 are reductions~~ of ~~approximately~~ ~~$11.6 million for~~ the ~~joint~~next ~~venture~~ten ~~properties. (2)Annualized Cash~~years ~~Rent~~and ~~Per~~thereafter ~~Leased Square Foot of Expiring Leases represents Annualized Cash Rent of Expiring Leases, as described in footnote~~ (~~1) above,~~assuming ~~presented~~that onno atenants ~~per~~exercise ~~leased~~renewal ~~square~~or ~~foot~~cancellation ~~basis. (3)Includes 24,280~~options ~~square~~and ~~feet~~that ~~occupied~~there byare ~~month-to-month~~no ~~holdover~~tenant ~~tenants~~bankruptcies ~~whose~~or ~~leases~~other ~~expired prior to~~tenant ~~December 31, 2011. (4~~defaults)~~Represents Citigroup's~~: ~~13-year net lease at 388-390 Greenwich Street. The current net rent is $39.66 per square foot with annual CPI escalation.~~

Leases in our Suburban portfolio, as at many other suburban office properties, typically have an initial term of five to ten years. For the five years ending December 31, 2016, the average annual rollover at our Suburban consolidated and unconsolidated office properties is expected to be approximately 0.4 million square feet and 0.2 million square feet, respectively, representing an average annual expiration rate of 13.0% and 7.0% respectively, per year (assuming no tenants exercise renewal or cancellation options and there are no tenant bankruptcies or other tenant defaults).

Suburban Consolidated Office Properties Year of Lease Expiration					Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)

2013(3)	56	299,764	10.32	%	$	8,646,612	$	28.84
2014	36	220,641	7.59			7,740,864		35.08
2015	43	303,013	10.43			10,395,732		34.31
2016	49	686,280	23.62			21,786,774		31.75
2017	27	130,555	4.49			4,290,744		32.87
2018	23	169,792	5.84			6,199,776		36.51
2019	17	498,180	17.15			13,760,748		27.62
2020	13	240,732	8.29			7,439,448		30.90
2021	9	144,861	4.99			3,535,596		24.41
2022 & thereafter	18	211,683	7.28			7,240,410		34.20

Total/weighted average	291	2,905,501	100.00	%	$	91,036,704	$	31.33

~~The~~ ~~following~~ ~~tables~~ (1)Annualized Cash ~~set~~Rent ~~forth~~of aExpiring ~~schedule~~Leases ofrepresents the ~~annual~~monthly ~~lease~~contractual ~~expirations~~rent atunder ~~our~~existing ~~Suburban~~leases ~~consolidated~~as of December 31, 2012 multiplied by 12. This amount reflects total rent before any rent abatements and ~~unconsolidated~~includes ~~office~~expense ~~properties~~reimbursements, ~~respectively,~~which ~~with~~may ~~respect~~be toestimated as of such date. Total rent abatements for leases in ~~place~~ effect as of December 31, 2012 ~~2011~~ for ~~each~~the of12 months ~~the~~ending ~~next~~December 31, ~~ten~~2013, ~~years~~are ~~and~~reductions ~~thereafter~~of approximately $2.7 million for the properties. (~~assuming~~2)Annualized Cash ~~that~~Rent noPer ~~tenants~~Leased ~~exercise~~Square ~~renewal~~Foot orof ~~cancellation~~Expiring ~~options~~Leases ~~and~~represents ~~that~~Annualized ~~there~~Cash ~~are~~Rent noof ~~tenant~~Expiring ~~bankruptcies~~Leases, oras ~~other~~described in footnote ~~tenant~~(1) above, ~~defaults~~presented on a per leased square foot basis. (3):Includes 99,188 square feet occupied by month-to-month holdover tenants whose leases expired prior to December 31, 2012.

Suburban Consolidated Office Properties Year of Lease Expiration					Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)
2012(3)	62	338,114	11.56	%	$	9,071,472	$	26.83
2013	36	315,186	10.78			10,553,724		33.48
2014	34	282,851	9.67			9,166,980		32.41
2015	33	286,416	9.79			9,461,916		33.04
2016	47	678,059	23.19			20,865,204		30.77
2017	13	90,270	3.09			2,809,716		31.13
2018	16	161,910	5.54			5,427,744		33.52
2019	11	251,410	8.60			7,579,200		30.15
2020	11	234,319	8.01			6,433,008		27.45
2021 & thereafter	19	285,816	9.77			8,605,320		30.11
Total/weighted average	282	2,924,351	100.00	%	$	89,974,284	$	30.77

(1)Annualized Cash Rent of Expiring Leases represents the monthly contractual rent under existing leases as of December 31, 2011 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2011 for the 12 months ending December 31, 2012, are reductions of approximately $2.6 million for the properties. (2)Annualized Cash Rent Per Leased Square Foot of Expiring Leases represents Annualized Cash Rent of Expiring Leases, as described in footnote (1) above, presented on a per leased square foot basis. (3)Includes 118,194 square feet occupied by month-to-month holdover tenants whose leases expired prior to December 31, 2011.

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Suburban Unconsolidated Office Properties Year of Lease Expiration					Annualized Cash Rent of Expiring Leases(1)		Annualized Cash Rent Per Leased Square Foot of Expiring Leases(2)
2012(3)	32	286,816	10.71	%	$	10,312,397	$	35.95
2013(3)	31	213,923	17.14	%	$	6,641,388	$	31.05
2013	23	89,924	3.36			2,971,432		33.04
2014	32	291,251	23.33			10,318,416		35.43
2014	30	302,318	11.29			10,759,512		35.59
2015	24	159,070	12.74			4,903,008		30.82
2015	20	140,862	5.26			4,397,064		31.22
2016	13	80,043	6.41			3,129,612		39.10
2016	10	112,493	4.20			3,512,909		31.23
2017	17	124,946	10.01			4,691,748		37.55
2017	7	63,196	2.36			2,423,364		38.35
2018	8	89,553	7.17			3,152,124		35.20
2018	4	61,523	2.30			2,272,032		36.93
2019	6	52,455	4.20			1,733,184		33.04
2019	6	37,252	1.39			1,391,112		37.34
2020	7	48,459	3.88			1,668,060		34.42
2020	8	1,436,236	53.64			40,804,884		28.41
2021	5	82,241	6.59			2,817,000		34.25
2021 & thereafter	9	146,968	5.49			4,554,862		30.99
2022 & thereafter	8	106,465	8.53			3,422,904		32.15
Total/weighted average	~~149~~151	21,~~677~~248,~~588~~406	100.00	%	$	8342,~~399~~477,~~568~~444	$	3134.1503

(1)Annualized Cash Rent of Expiring Leases represents the monthly contractual rent under existing leases as of December 31, ~~2011~~ 2012 multiplied by 12. This amount reflects total rent before any rent abatements and includes expense reimbursements, which may be estimated as of such date. Total rent abatements for leases in effect as of December 31, 2012 ~~2011~~ for the 12 months ending December 31, ~~2012~~2013, are reductions of approximately $2.82 million for the joint venture properties. (2)Annualized Cash Rent Per Leased Square Foot of Expiring Leases represents Annualized Cash Rent of Expiring Leases, as described in footnote (1) above, presented on a per leased square foot basis. (3)Includes 26100,~~540~~528 square feet occupied by month-to-month holdover tenants whose leases expired prior to December 31, ~~2011~~2012.

Tenant Diversification

At December 31, ~~2011~~2012, our portfolio was leased to approximately 1,~~385~~399 tenants, which are engaged in a variety of businesses, including professional services, financial services, media, apparel, business services and government/non-profit. The following table sets forth information regarding the leases with

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respect to the 30 largest tenants in our portfolio, based on the amount of square footage leased by our tenants as of December 31, ~~2011~~2012:

Tenant(1)	Properties
Citigroup, N.A.	388 & 390 Greenwich Street, 485 Lexington Avenue, 750 Third Avenue, 800 Third Avenue, & 750 Washington Blvd ~~& Court Square~~	~~108~~96	43,~~425~~023,~~032~~423	1410.12	%	76.24	%
Viacom International, Inc.	1515 Broadway	41222	1,271,881	4.03		6.9
Credit Suisse Securities (USA), Inc.	1 Madison Avenue & 280 Park Avenue	~~108~~96	1,~~250~~238,~~893~~829	4.02		6.40
AIG Employee Services, Inc.	180 Maiden Lane	2816	803,222	2.67		1.8
Random House, Inc.	1745 Broadway	78126	644,598	2.12		1.0
Debevoise & Plimpton, LLP	919 Third Avenue	~~120~~108	619,353	2.01		1.8
Omnicom Group, Inc.	220 East 42nd Street & 420 Lexington Avenue	6452	494,476	1.67		1.8
The City of New York	16 Court Street & 100 Church Street	22255	~~345~~341,903	1.12		1.2
Advance Magazine Group, Fairchild Publications	750 Third Avenue & 485 Lexington Avenue	~~110~~98	339,195	1.1		1.3
Ralph Lauren Corporation	625 Madison Avenue ~~& 379 West Broadway~~	9684	~~295~~330,~~965~~486	01.91		1.69
C.B.S. Broadcasting, Inc.	555 West 57th Street	144	282,385	0.9		0.9
Harper Collins Publishers LLC	1350 Avenue of the Americas & 10 East 53rd Street	95	289,534	1.0		0.9
Schulte, Roth & Zabel LLP	919 Third Avenue	114	263,186	0.8		0.7
C.B.S. Broadcasting, Inc.	555 West 57th Street	132	282,385	1.0		0.9
The Metropolitan Transportation Authority	333 West 34th Street & 420 Lexington Avenue	109	242,663	0.8		0.8
Schulte, Roth & Zabel LLP	919 Third Avenue	102	263,186	0.9		0.7
New York Presbyterian Hospital	673 First Avenue	116	232,772	0.7		0.8
The Metropolitan Transportation Authority	333 West 34th Street & 420 Lexington Avenue	97	242,663	0.8		0.8
BMW of Manhattan	555 West 57th Street	127	227,782	0.7		0.5
New York Presbyterian Hospital	673 First Avenue	104	232,772	0.8		1.0
Stroock, Stroock & Lavan LLP	180 Maiden Lane	137	223,434	0.7		0.4
HF Management Services LLC	100 Church Street	231	230,394	0.8		0.6
The Travelers Indemnity Company	485 Lexington Avenue & 2 Jericho Plaza	56	213,456	0.7		0.8
BMW of Manhattan	555 West 57th Street	115	227,782	0.8		0.5
The City University of New York-CUNY	555 West 57th Street & 16 Court Street	228	207,136	0.7		0.6
Stroock, Stroock & Lavan LLP	180 Maiden Lane	125	223,434	0.8		0.4
Verizon	120 West 45th Street, 1100 King Street Bldg 1, 1 Landmark Square, 2 Landmark Square & 500 Summit Lake Drive	96	204,076	0.6		1.1
The Travelers Indemnity Company	485 Lexington Avenue & 2 Jericho Plaza	44	213,456	0.7		0.8
Amerada Hess Corp.	1185 Avenue of the Americas	192	181,569	0.6		1.0
The City University of New York—CUNY	555 West 57th Street & 16 Court Street	216	207,136	0.7		0.6
HF Management Services LLC	100 Church Street	243	172,577	0.5		0.4
Verizon	120 West 45th Street, 1100 King Street Bldg. 1, 1 Landmark Square, 2 Landmark Square & 500 Summit Lake Drive	84	204,076	0.7		1.1
Fuji Color Processing Inc.	200 Summit Lake Drive	15	165,880	0.5		0.5
Amerada Hess Corp.	1185 Avenue of the Americas	180	181,569	0.6		1.1
King & Spalding	1185 Avenue of the Americas	166	162,243	0.5		0.9
Fuji Color Processing Inc.	200 Summit Lake Drive	78	165,880	0.6		0.5
United Nations	220 East 42nd Street	~~123~~111	162,146	0.5		0.6
News America Incorporated	1185 Avenue of the Americas	~~107~~95	161,722	0.5		1.2
National Football League	280 Park Avenue	2	159,368	0.5		0.5
King & Spalding	1185 Avenue of the Americas	154	159,943	0.5		0.9
National Hockey League	1185 Avenue of the Americas	131	148,217	0.5		1.0
New York Hospitals Center/Mount Sinai	625 Madison Avenue & 673 First Avenue	166	157,433	0.5		0.7
New York Hospitals Center/Mount Sinai	625 Madison Avenue & 673 First Avenue	178	146,917	0.5		0.6
National Hockey League	1185 Avenue of the Americas	119	148,217	0.5		1.1
D.E. Shaw and Company L.P.	120 West 45th Street	~~111~~99	145,964	0.5		0.8
Banque National De Paris	919 Third Avenue	5543	145,834	0.5		0.4
Total Weighted Average(3)			1413,~~339~~152,~~845~~892	4544.75	%	45.57	%

(1)This list is not intended to be representative of our tenants as a whole. (2)Lease term from December 31, ~~2011~~2012 until the date of the last expiring lease for tenants with multiple leases. (3)Weighted average calculation based on total rentable square footage leased by each tenant.

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Environmental Matters

We engaged independent environmental consulting firms to perform Phase I environmental site assessments on our portfolio, in order to assess existing environmental conditions. All of the Phase I assessments met the ASTM Standard. Under the ASTM Standard, a Phase I environmental site assessment consists of a site visit, an historical record review, a review of regulatory agency data bases and records, and interviews with on-site personnel, with the purpose of identifying potential environmental concerns associated with real estate. These environmental site assessments did not reveal any known environmental liability that we believe will have a material adverse effect on our results of operations or financial condition.

ITEM 3. LEGAL PROCEEDINGS

As of December 31, ~~2011~~2012, we were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio other than routine litigation arising in the ordinary course of business or litigation that is adequately covered by insurance.

ITEM 4. ~~MINING~~MINE SAFETY DISCLOSURES

Not Applicable.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for the common units. On February 15, ~~2012~~2013, there were approximately 48 holders of record and 8994,~~129~~038,~~284~~485 common units outstanding, 86 91,~~368~~278,~~447~~727 of which were held by SL Green. The table below sets forth the quarterly distributions paid by us to holders of common operating partnership units with respect to the periods indicated.

	2010		2011
	2012		2011
Quarter Ended	Distributions		Distributions
March 31	$	0.~~100~~25	$	0.~~100~~10
June 30	$	0.~~100~~25	$	0.~~100~~10
September 30	$	0.~~100~~25	$	0.~~100~~10
December 31	$	0.~~100~~33	$	0.~~250~~25

SL Green expects to pay dividends to its stockholders on a quarterly basis based on the distributions we make to it primarily from property revenues net of operating expenses or, if necessary, from working capital or borrowings. If SL Green declares a dividend, such dividend is generally paid in the subsequent quarter.

In order to enable SL Green to maintain its qualification as a REIT, it must make annual distributions to its stockholders of at least 90% of its taxable income (not including net capital gains). SL Green has adopted a policy of paying regular quarterly dividends on its common stock, and we have adopted a policy of paying regular quarterly distributions on our common units corresponding to dividends paid by SL Green. Cash distributions have been paid on the common stock of SL Green and our common units since the initial public offering of SL Green. Distributions are declared at the discretion of the board of directors of SL Green and depend on actual and anticipated cash from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code and other factors SL Green's board of directors may consider relevant.

Each time SL Green issues shares of stock (other than in exchange for operating partnership units, or OP Units, when such OP Units are presented for redemption), it contributes the proceeds of such issuance to us in return for an equivalent number of partnership units with rights and preferences analogous to the shares issued.

ISSUER PURCHASES OF EQUITY SECURITIES

None.

SALE OF UNREGISTERED AND REGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIES

During the years ended December 31, ~~2011~~2012, ~~2010~~2011 and ~~2009~~2010, SL Green issued 121,~~423~~096,384, ~~278~~12,~~865~~423 and ~~378~~278,~~344~~865 shares of common stock, respectively, to holders of our units of limited partnership ininterest ~~the Operating Partnership~~ upon the redemption of such units pursuant to the ~~partnership agreement of the~~ Operating Partnership agreement. The issuance of such shares was exempt from registration under the Securities Act, pursuant to the exemption contemplated by Section 4(2) thereof for transactions not involving a public offering. The units were converted into an equal number of shares of common stock.

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The ~~PART~~following IItable summarizes information, as of December 31, 2012, relating to SL Green's equity compensation plans pursuant to which shares of SL Green's common stock or other equity securities may be granted from time to time.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

	(a)			(b)			(c)
Equity compensation plans approved by security holders(1)		3,336,200	(2)	$	75.05	(3)		433,667	(4)
Equity compensation plans not approved by security holders		—			—			—

Total		3,336,200		$	75.05			433,667

~~The~~ ~~following~~ ~~table~~ (1)Includes information ~~summarizes~~related ~~information~~to SL Green's Second Amended and Restated 2005 Stock Option and Incentive Plan, Amended 1997 Stock Option and Incentive Plan, as amended and 2008 Employee Stock Purchase Plan. (2)Includes (i) 1,201,000 shares of ~~December~~SL Green common stock issuable upon the exercise of outstanding options (480,000 of which are vested and exercisable), (ii) 31412,500 ~~2011~~restricted stock units and 75,156 ~~relating~~phantom stock units that may be settled in shares of common stock (377,100 of which are vested), (iii) 541,166 LTIP units that, upon the satisfaction of certain conditions, are convertible into common units, which may be presented to us for redemption and acquired by us for shares of SL Green common stock (none of which are vested) and (iv) shares of SL Green's ~~equity~~common ~~compensation~~stock ~~plans~~reserved in connection with LTIP units issued pursuant to the 2011 Long-Term Outperformance Plan, all of which ~~shares~~remain subject to performance-based vesting and a dollar value limitation on the number of LTIP units that may be earned based on SL Green's common stock price when the LTIP units are earned. (3)Because there is no exercise price associated with restricted stock units, phantom stock units or ~~other~~LTIP units, these awards are not included in the ~~equity~~weighted-average ~~securities~~exercise ~~may~~price becalculation. (4)Balance is after reserving for shares underlying outstanding restricted stock units, phantom stock units granted ~~from~~pursuant ~~time~~to our Non-Employee Directors' Deferral Program and LTIP units, including, among others, outstanding LTIP units issued under SL Green's 2011 Long-Term Outperformance Plan, which remain subject to performance-based ~~time~~vesting. Number of securities remaining available consists exclusively of shares remaining available for issuance under our 2008 Employee Stock Purchase Plan.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders(1)		1,277,200	$	63.37		2,333,000	(2)
Equity compensation plans not approved by security holders		—		—		—
Total		1,277,200	$	63.37		2,333,000

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PART II

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth our selected financial data and should be read in conjunction with our Financial Statements and notes thereto included in Item 8, "Financial Statements and Supplementary Data" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K.

In connection with this Annual Report on Form 10-K, we are restating our historical audited consolidated financial statements as a result of classifying certain properties as held for sale. As a result, we have reported revenue and expenses from these properties as discontinued operations for each period presented in our Annual Report on Form 10-K. These reclassifications had no effect on our reported net income or funds from operations.

We are also providing updated summary selected financial information, which is included below, reflecting the prior period reclassification as discontinued operations of the property sold during 2012 and those designated as held for sale as of December 31, 2012.

	Year Ended December 31,

Operating Data (In thousands, except per share data)	2012			2011			2010			2009			2008
Total revenues	$	1,400,255		$	1,263,428		$	1,084,386		$	978,361		$	1,047,819

Operating expenses		298,322			263,709			224,693			209,272			219,427
Real estate taxes		210,467			174,454			145,830			136,636			121,857
Ground rent		37,866			32,919			31,191			31,826			31,494
Interest expense, net of interest income		330,569			285,917			230,648			232,655			289,061
Amortization of deferred finance costs		19,450			14,118			9,046			7,065			6,139
Depreciation and amortization		332,028			277,345			225,193			220,396			210,813
Loan loss and other investment reserves, net of recoveries		564			6,722			17,751			150,510			115,882
Transaction related costs		5,625			5,561			11,849			—			—
Marketing, general and administrative		82,840			80,103			75,946			73,992			104,583

Total expenses		1,317,731			1,140,848			972,147			1,062,352			1,099,256

Equity in net income from unconsolidated joint ventures		76,418			1,583			39,607			62,878			59,961
Equity in net gain on sale of interest in unconsolidated joint venture/ real estate		37,053			2,918			128,921			6,691			103,056
Purchase price fair value adjustment		—			498,195			—			—			—
Gain (loss) on investment in marketable securities		4,940			4,866			490			(396	)		(147,489	)
Depreciable real estate reserves		—			(5,789	)		(2,750	)		—			—
Gain (loss) on early extinguishment of debt		(6,978	)		904			(1,900	)		86,006			77,465

Income from continuing operations		193,957			625,257			276,607			71,188			41,556
Discontinued operations		15,743			51,865			42,549			477			362,492

Net income		209,700			677,122			319,156			71,665			404,048
Net income attributable to noncontrolling interests in other partnerships		(5,591	)		(15,083	)		(14,007	)		(12,900	)		(8,677	)
Preferred unit distributions		(2,107	)		—			—			—			—

Net income attributable to SLGOP		202,002			662,039			305,149			58,765			395,371
Preferred unit redemption costs		(10,010	)		—			—			—			—
Perpetual preferred unit distributions		(30,411	)		(30,178	)		(29,749	)		(19,875	)		(19,875	)

Net income attributable to SLGOP common unitholders	$	161,581		$	631,861		$	275,400		$	38,890		$	375,496

Net income per common unit—Basic	$	1.75		$	7.37		$	3.47		$	0.54		$	6.22

Net income per common unit—Diluted	$	1.74		$	7.33		$	3.45		$	0.54		$	6.20

Cash dividends declared per common unit	$	1.08		$	0.55		$	0.40		$	0.6750		$	2.7375

Basic weighted average common units outstanding		92,526			85,748			79,422			71,965			60,336

Diluted weighted average common units and common unit equivalents outstanding		92,873			86,244			79,761			72,044			60,598

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	As of December 31,

Balance Sheet Data (In thousands)	2012		2011		2010		2009		2008
Commercial real estate, before accumulated depreciation	$	11,662,953	$	11,147,151	$	8,890,064	$	8,257,100	$	8,201,789
Total assets		14,387,754		13,483,852		11,300,294		10,487,577		10,984,353
Mortgages and other loans payable, revolving credit facility, senior unsecured notes and trust preferred securities		6,520,420		6,035,397		5,251,013		4,892,688		5,581,559
Capital		7,120,010		6,650,339		5,481,882		4,997,747		4,569,290

ITEM 6. SELECTED FINANCIAL DATA

We are also providing updated summary selected financial information, which is included below, reflecting the prior period reclassification as discontinued operations of the property sold during 2011 and those designated as held for sale as of December 31, 2011.

	Year Ended December 31,
Operating Data	2011			2010			2009			2008			2007
(In thousands, except per share data)
Total revenue	$	1,263,428		$	1,084,386		$	978,361		$	1,047,819		$	946,016
Operating expenses		263,709			224,693			209,272			219,427			199,892
Real estate taxes		174,454			145,830			136,636			121,857			116,729
Ground rent		32,919			31,191			31,826			31,494			32,389
Interest expense, net of interest income		285,917			230,648			232,655			289,061			256,941
Amortization of deferred finance costs		14,118			9,046			7,065			6,139			15,893
Depreciation and amortization		277,345			225,193			220,396			210,813			169,066
Loan loss and other investment reserves, net of recoveries		6,722			17,751			150,510			115,882			—
Transaction related costs		5,561			11,849			—			—			—
Marketing, general and administration		80,103			75,946			73,992			104,583			93,045
Total expenses		1,140,848			972,147			1,062,352			1,099,256			883,955
Equity in net income from unconsolidated joint ventures		1,583			39,607			62,878			59,961			46,765
Equity in net gain on sale of interest in unconsolidated joint venture/ real estate		2,918			128,921			6,691			103,056			31,509
Purchase price fair value adjustment		498,195			—			—			—			—
Gain (loss) on investment in marketable securities		4,866			490			(396	)		(147,489	)		—
Depreciable real estate reserves		(5,789	)		(2,750	)		—			—			—
Gain(loss) on early extinguishment of debt		904			(1,900	)		86,006			77,465			—
Income from continuing operations		625,257			276,607			71,188			41,556			140,335
Discontinued operations		51,865			42,549			477			362,492			542,362
Net income		677,122			319,156			71,665			404,048			682,697
Net income attributable to noncontrolling interests in other partnerships		(15,083	)		(14,007	)		(12,900	)		(8,677	)		(10,383	)
Net income attributable to SLGOP		662,039			305,149			58,765			395,371			672,314
Preferred dividends		(30,178	)		(29,749	)		(19,875	)		(19,875	)		(19,875	)
Net income attributable to SLGOP common unitholders	$	631,861		$	275,400		$	38,890		$	375,496		$	652,439
Net income per common unit—Basic	$	7.37		$	3.47		$	0.54		$	6.22		$	10.66
Net income per common unit—Diluted	$	7.33		$	3.45		$	0.54		$	6.20		$	10.54
Cash dividends declared per common unit	$	0.55		$	0.40		$	0.6750		$	2.7375		$	2.89
Basic weighted average common units outstanding		85,748			79,422			71,965			60,336			61,188
Diluted weighted average common units and common unit equivalents outstanding		86,244			79,761			72,044			60,598			61,885

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PART II

ITEM 6. SELECTED FINANCIAL DATA

	As of December 31,
Balance Sheet Data (In thousands)	2011		2010		2009		2008		2007
Commercial real estate, before accumulated depreciation	$	11,147,151	$	8,890,064	$	8,257,100	$	8,201,789	$	8,622,496
Total assets		13,483,852		11,300,294		10,487,577		10,984,353		11,430,078
Mortgages and other loans payable, revolving credit facility, senior unsecured notes and trust preferred securities		6,035,397		5,251,013		4,892,688		5,581,559		5,658,149
Capital		6,650,339		5,481,882		4,997,747		4,569,290		4,606,215

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PART II

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. SL Green is a self-managed real estate investment trust, or REIT, with in-house capabilities in property management, acquisitions, financing, development, construction and leasing. Unless the context requires otherwise, all references to "we," "our" and "us" in this section mean SLGOP and all entities owned or controlled by SLGOP.

Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P., or ROP, are ~~subsidiaries~~our ofwholly-owned ~~SLGOP~~subsidiaries.

The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in Item 8 of this Annual Report on Form 10-K.

The New York City commercial real estate market ~~strengthened~~continued to strengthen in ~~2011~~2012, and we took advantage of ~~the~~this strengthening market in improving occupancies and deploying capital in the borough of Manhattan to strategically position usthe Company for future growth ~~as market conditions improve~~.

Leasing and Operating

~~Improvements~~We inhave ~~leasing~~historically ~~conditions,~~outperformed ~~which~~the ~~began~~Manhattan ~~during~~office ~~2010~~market, ~~continued~~and ~~into~~did ~~2011.~~so ~~Total~~again ~~2011~~in 2012. Our Manhattan ~~new~~office ~~leasing~~property ~~activity~~occupancy ~~was~~on ~~30.1 million~~same-store ~~square~~properties ~~feet,~~increased ~~the~~to ~~largest~~93.8% ~~amount~~from of93.0% ~~new leasing~~ in ~~any~~the prior year. ~~since~~During ~~2000.~~2012, ~~Net~~we ~~absorption~~signed ~~exceeded~~office 5leases in Manhattan encompassing 3.27 million square feet ~~during the year~~, of which 3.20 million square feet ~~was~~represented ~~absorbed~~office inleases ~~mid-town~~that ~~Manhattan,~~replaced ~~the~~previously ~~location~~occupied ofspace. ~~53%~~Our ofmark-to-market ~~our~~on ~~office~~these ~~properties~~3.0 million ~~(by~~ square ~~footage).~~feet ~~The~~of ~~Midtown~~signed ~~submarket~~Manhattan office ~~absorption~~leases ~~resulted~~that inreplaced ~~decreases~~previously inoccupied ~~overall~~space ~~office~~was ~~vacancy from 10~~7.65% atfor ~~December 31,~~2012. ~~2010~~The tohighlight ~~9.6%~~of atour ~~December 31,~~leasing ~~2011~~activity ~~and~~during 2012 was the ~~portion~~signing of ~~available~~the ~~space~~largest ~~comprised~~non-sale ofleaseback ~~sublease~~office ~~space~~lease ~~declined~~in Manhattan's tohistory, a 1.6% million ofsquare ~~total~~foot ~~available~~lease ~~inventory.~~with InViacom ~~addition~~International, Inc. ~~no new~~which ~~office~~represented ~~space~~the ~~was~~entirety ~~added~~of to the ~~Midtown~~ office ~~inventory,~~space ~~with~~at ~~approximately 0.8~~1515 ~~million~~Broadway. ~~square~~In ~~feet~~addition, ~~(0.2%~~we completed the lease-up of ~~the~~100 ~~total~~Church ~~392.9 million~~Street ~~square~~with ~~foot~~the ~~Manhattan~~485,000 ~~office~~square ~~inventory)~~foot ~~currently under~~early ~~construction~~renewal and ~~scheduled~~expansion tolease ~~come~~with ~~online~~the byCity ~~2013~~of New York.

~~Net~~New ~~absorption~~leasing ~~that~~activity ~~reduced~~in ~~vacancy~~Manhattan in 2012 totaled 23.2 million square feet, ~~and~~slightly ~~lack~~below ofthe ~~new~~ten-year ~~supply~~average. ~~created~~Direct ~~conditions~~absorption in ~~which~~Manhattan ~~rents~~exceeded 1.4 million ~~increased~~square feet during the year., ~~Asking~~of ~~rents~~which ~~for~~0.2 million ~~direct~~square ~~space~~feet was absorbed in ~~midtown~~Midtown ~~increased~~Manhattan, ~~during~~the ~~2011~~location ~~by 3.7~~of 82% toof ~~$66.75~~our ~~per~~in-service office properties (by square ~~foot~~footage). ByThis leasing activity in 2012 occurred despite the ~~end~~headwinds ofcaused ~~2011~~in part by the presidential election, ~~asking~~fiscal ~~rents~~cliff, ~~had~~continued ~~increased~~implementation byof 9the provisions of the Dodd-Frank Act and Hurricane Sandy.5% ~~since~~These factors impacted the ~~recessionary~~leasing ~~trough~~markets resulting in ~~rents~~the inMidtown ~~early~~submarket ~~2010~~overall office vacancy increasing from 9.6% ~~Over~~at December 31, 2011 to 10.3% at December 31, 2012. However, no new office space was added to the ~~same~~Midtown ~~period~~office inventory, ~~net~~with ~~effective~~approximately ~~rents~~1.8 million square feet (~~which~~0.5% ~~take~~of ~~into~~the total 392.9 million ~~consideration~~square ~~leasing~~foot ~~concessions~~Manhattan ~~and~~office ~~commissions~~inventory), ~~increased~~currently under construction and scheduled to be placed in service by 212014.3%

WeDemand ~~have~~for ~~historically~~space ~~outperformed~~in ~~the~~certain ~~Manhattan~~sub-markets ~~office~~such ~~market,~~as ~~and~~Midtown itSouth ~~did~~and soa inlack ~~2011.~~of ~~Our~~new ~~office~~supply ~~property~~created ~~occupancy~~conditions onin ~~stabilized~~which ~~same-store~~asking ~~assets~~rents ~~increased~~for todirect ~~95.4%~~space ~~from 94.6%~~ in ~~the~~Midtown ~~earlier~~South ~~year~~increased during ~~(excluding~~2012 ~~100~~by ~~Church~~8.3% ~~which~~to is$50.02 inper ~~lease-up)~~square foot. ~~The~~Asking ~~Company's~~rents ~~mark-to-market~~for ondirect ~~leases~~space ~~that~~in ~~replaced~~Midtown ~~previously~~increased ~~occupied~~during ~~space~~2012 ~~was~~by 7.3.0% ~~for 2011~~to $68.77 ~~Our~~per ~~leasing~~square ~~activity~~foot ~~during~~and ~~2011~~have ~~was~~increased ~~representative~~by of8.8% asince ~~diverse~~the ~~array~~recessionary oftrough in ~~industries,~~in ~~with~~the afirst ~~broad~~quarter ~~cross section~~ of ~~leasing~~2010. asOver ~~evidenced~~the bysame ~~our~~period, ~~largest~~net ~~leases~~effective inrents ~~2011~~(which ~~that~~take ~~included~~into ~~professional services,~~consideration ~~health~~leasing ~~care,~~concessions) ~~media~~have ~~and~~increased ~~advertising,~~by ~~and government~~26.4%.

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We ~~PART~~incurred IIminimal damage at most of the properties in our portfolio due to Hurricane Sandy. The most impacted property was 180 Maiden Lane, located in flood Zone A in Manhattan, which experienced heavy flooding. Our operations team, with assistance from other professionals, was able to restore the building's operations within three weeks of the hurricane. We carry comprehensive property, casualty and flood insurance on our properties and full coverage of losses is anticipated.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Acquisition and Disposition Activity

InSales ~~anticipation~~volume ofin ~~the~~Manhattan ~~improving~~in ~~market,~~2012 ~~and~~increased ~~because~~4% weto ~~were~~$26.5 billion ~~able~~compared to ~~source~~$25.5 billion ~~opportunities with value enhancement components, SL Green acquired equity interests~~ in ~~9 buildings during~~ 2011, ~~with~~partly ~~total~~as ~~investments~~a result of a ~~$3.9 billion.~~flurry ~~Certain~~ of ~~the~~activity ~~investments~~in ~~provide~~the ~~upside~~fourth ~~through~~quarter. ~~repositioning and leasing including 3 Columbus Circle~~Nevertheless, ~~that~~consistent ~~was purchased~~ with ~~20.1 percent occupancy~~our inmulti-faceted ~~January~~approach ~~2011 and that was leased~~ to ~~61%~~property ~~through January 2012~~acquisitions, ~~and~~we ~~280~~were ~~Park~~able ~~Avenue,~~to ~~which~~source ~~when~~transactions ~~repositioned~~that ~~will~~provide bevalue ~~among the highest quality office buildings in Manhattan. In addition,~~enhancement ~~major~~opportunities, ~~2011~~including ~~transactions~~the ~~included~~acquisition ~~purchasing~~of ~~our~~equity ~~partner's~~ interests in ~~the~~17 ~~high~~office, ~~quality~~retail ~~521 Fifth Avenue~~ and ~~1515~~multi-family ~~Broadway~~ properties during 2012, ~~and~~representing atotal ~~portfolio~~investments of ~~prime retail properties that included three multifamily residential assets which closed in 2012~~$1.3 billion.

We also took advantage of the improving market conditions and interest by institutions and individuals seeking ownership interests in properties to sell assets, disposing of properties with more limited growth opportunities, and raising efficiently priced capital for reinvestment. During the year, ~~SL Green~~we sold 28our ~~West~~fee ~~44th Street,~~interest ~~and~~in ~~entered~~292 ~~into contracts~~Madison toAvenue ~~sell~~and ~~One~~a ~~Court~~49.5% ~~Square,~~partnership ~~141~~interest in 521 Fifth Avenue ~~and~~as ~~its~~well ~~fee~~as ~~interest~~several inother ~~292~~joint ~~Madison~~venture ~~Avenue~~assets, including One Court Square, Long Island City, New York.

Debt and Preferred Equity

Beginning in 2010, we saw ~~the~~an increase in opportunities to acquire existing debt and preferred equity positions in high quality Manhattan office properties at discounts that enabled us to generate high risk adjusted yields, and offer off-market access to property acquisitions. As ~~the~~2012 ~~year~~ progressed, and the availability of discounted debt and preferred equity in high quality properties ~~that could be purchased at discounts~~ waned, we began to ~~see~~focus ~~opportunities~~on tothe ~~originate~~origination of financings, typically in the form of preferred equity and mezzanine debt, for owners or acquirers seeking higher leverage than has been available from traditional lending sources ~~that~~who ~~continue~~are tolending beat ~~constrained,~~modest ~~and~~leverage ~~that~~levels. ~~provide~~Traditional ~~only~~sources of junior financings have not yet materialized as a result of the Dodd-Frank Act and other banking regulations. This provided us with an opportunity to fill this need by providing more modest amounts of leverage. The typical investments made by us during ~~the~~2012 ~~last half of 2011~~ were to reputable owners or acquirers, and at leverage levels which are senior to sizable equity investments by the ~~borrowers~~sponsors. During ~~2011~~2012, our debt and preferred equity ~~and debt~~ activities included purchases ofand ~~$160.3 million,~~ originations of $~~449~~637.41 million, redemptions and sales of $~~287~~264.20 million and ~~conversions~~ the conversion of a $~~302~~25.20 million investment into equity ~~property~~ ownership. Property equity ownership resulting from this lending program during ~~2011~~2012 included ~~280~~a ~~Park~~4.5 million ~~Avenue~~square ~~and~~foot ~~110~~west ~~East 42nd Street~~coast portfolio of office properties.

Outlook

Several factors introduced into the market during the second half of ~~2011~~2012 have modestly reduced expectations offor the recovery inof jobs and in demand for office space in ~~2012~~2013. Those factors include ~~weaker~~increased ~~financial~~ordinary ~~results~~and ~~from~~capital ~~large~~gains ~~New~~tax ~~York~~rates ~~City~~and ~~based~~additional ~~financial~~cost ~~institutions~~cutting ~~as driven~~ by ~~exogenous factors such as~~ the ~~European~~financial ~~credit crisis~~services sector. Despite these factors, we continue to see a solid leasing market and ~~due to~~ the ~~more limited supply of space and lack of new supply, the~~ potential for improving leasing fundamentals as we progress through the year.

~~Our significant~~ ~~activities~~Highlights ~~for~~from ~~2011 included:~~2012

41 Our significant activities for 2012 included:

•: Directly acquired or consolidated joint venture interests in 12 properties for aggregate gross purchase prices of $641.3 million encompassing 1.1 million square feet.
•: Invested in five properties through joint ventures for aggregate gross purchase prices of $626.7 million and encompassing 0.6 million square feet.
•: Closed on a $1.6 billion 5-year credit facility.

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•: SL Green sold 2.6 million shares of common stock through our "at-the-market" equity offering programs raising net proceeds of $201.3 million were used to repay certain of our existing indebtedness, make investments in additional properties and debt and preferred equity investments, and for general corporate purposes. SL Green contributed the net offering proceeds of approximately $201.3 million to us in exchange for an equivalent number of operating partnership units of a corresponding class.
•: Issued $200.0 million principal amount of 4.50% senior unsecured notes, due 2022, at par. The net proceeds from the offering (approximately $198.2 million) were used to repay certain of our existing indebtedness, make investments in additional properties, and for general corporate purposes.
•: Issued 6.50% Series I cumulative redeemable preferred units of limited partnership interest generating net proceeds to the Operating Partnership of $222.2 million, redeemed the entire $100.0 million, 7.875% Series D cumulative redeemable preferred units of limited partnership interest and redeemed $100.0 million of the 7.625% Series C cumulative redeemable preferred units of limited partnership interest.
•: Closed on a $175.0 million financing with a 1-year term and a 1-year extension option.
•: Closed on 5 mortgages totaling approximately $1.1 billion.
•: Signed 215 office leases totaling 3.7 million square feet in Manhattan.
•: Signed 107 office leases totaling 0.6 million square feet in the Suburbs.

As ~~PART~~of IIDecember 31, 2012, we owned the following interests in commercial office properties in the New York Metropolitan area, primarily in midtown Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, Long Island, Westchester County, Connecticut and Northern New Jersey, which are collectively known as the Suburban assets:

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Location	Ownership

Manhattan	Consolidated properties	27	18,347,945	93.8	%
	Unconsolidated properties	9	5,934,434	95.0	%
Suburban	Consolidated properties	25	3,863,000	79.9	%
	Unconsolidated properties	5	1,539,700	84.7	%

		66	29,685,079	91.7	%

As of December 31, 2011, we owned the following interests in commercial office properties in the New York Metropolitan area, primarily in midtown Manhattan. Our investments in the New York Metropolitan area also include investments in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey, which are collectively known as the Suburban assets:

Location	Ownership
Manhattan	Consolidated properties	26	18,429,945	92.8	%
	Unconsolidated properties	7	6,191,673	91.6	%
Suburban	Consolidated properties	25	3,863,000	80.5	%
	Unconsolidated properties	6	2,941,700	93.8	%
		64	31,426,318	91.2	%

(1): The weighted average occupancy represents the total leased square feet divided by total available rentable square feet.

WeAs of December 31, 2012, we also owned investments in ~~nine~~15 stand-alone retail properties encompassing approximately ~~349~~473,~~282~~764 square feet, ~~seven~~16 development properties ~~encompassing~~ encompassing approximately 12,~~395~~617,~~838~~491 square feet, ~~and~~two ~~three~~residential properties encompassing 385 units (approximately 430,482 square feet), two land interests asand ~~of December~~ 31 west coast office properties encompassing approximately 4,473,603 ~~2011~~square feet. In addition, we manage ~~three~~two office properties owned by third parties and affiliated companies encompassing approximately ~~0.9 million~~626,415 rentable square feet. As of December 31, 2012, we also held debt and preferred equity investments with a book value of $1.4 billion.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during

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generally ~~PART~~accepted IIin the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Investment in Commercial Real Estate Properties

On a periodic basis, we assess whether there are any ~~indicators~~indications that the value of our real estate properties may be impaired or that ~~its~~their carrying value may not be recoverable. A property's value is considered impaired if management's estimate of the aggregate future cash flows (undiscounted and without interest charges for consolidated properties) to be generated by the property are less than the carrying value of the property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the calculated fair value of the property. In addition, we assess our investments in unconsolidated joint ventures for ~~recoverability~~impairment, and if it is determined that a a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint venture's projected discounted cash flows. During ~~2011~~2010, we recorded a $52.8 million impairment charge inon ~~connection with the expected sale of~~ one of our equity investments. During ~~2010~~2011, we recorded a $25.8 million impairment charge onin connection with the expected sale of one of our equity investments. These charges are included in depreciable real estate reserves. See Note 6, "Investments in Unconsolidated Joint Ventures." We do not believe that the value of any of our consolidated properties or equity investments was impaired at December 31, ~~2011~~2012 and ~~2010~~2011, respectively.

A variety of costs are incurred in the development and leasing of our properties. After determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under development include specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. We consider a construction project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity. We cease capitalization on the portions substantially completed and occupied or held available for occupancy, and capitalize only those costs associated with the portions under construction.

We allocate the purchase price of real estate to land and building and, if determined to be material, intangibles, such as the value of above-, below-, and at-market leases and origination costs associated with the in-place leases. We depreciate the amount allocated to building and other intangible assets over their estimated useful lives, which generally range from three to 40 years and from one to 14 years, respectively. The values of the above- and below-market leases are amortized and recorded as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental income over the remaining term of the associated lease, which generally range from one to 14 years. The value associated with in-place leases are amortized over the expected term of the associated lease, which generally range from one to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and

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origination ~~PART~~costs IIare amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property. To the extent acquired leases contain fixed rate renewal options that are below market and determined to be material, we amortize such below market lease value into rental income over the renewal period.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.

Investment in Unconsolidated Joint Ventures

We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary. We consolidate those joint ventures that we control or which are VIEs and where we are considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us from consolidating these non-VIE entities. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Any difference between the carrying amount of these investments on our balance sheet and the underlying equity in net assets is amortized as an adjustment to equity in net income (loss) of unconsolidated joint ventures over the lesser of the joint venture term or 10 years. Equity income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture. When a capital event (as defined in each joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our increased economic percentage. We recognize incentive income from unconsolidated real estate joint ventures as income to the extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future obligations of the joint venture or may otherwise be committed to provide future additional financial support. None of the joint venture debt is recourse to us, except ~~for~~guarantees ~~$200.0 million which we guarantee~~ at ~~one~~two joint ~~venture~~ventures, totaling $218.4 million, and performance guarantees under a master lease at another joint venture. See Note 6, "Investments in Unconsolidated Joint Ventures," in the accompanying financial statements.

Revenue Recognition

Rental revenue is recognized on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rents receivable on the accompanying balance sheets. We establish, on a current basis, an allowance for future potential tenant credit losses, which may occur against this account. The balance reflected on the balance sheet is net of such allowance.

Interest income on debt and preferred equity investments is recognized over the life of the investment using the effective interest method and recognized on the accrual basis. Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan as an adjustment to yield. Anticipated exit fees, whose collection is expected, are also recognized over the term of the loan as an adjustment to yield. Fees on commitments that expire unused are recognized at expiration.

Income recognition is generally suspended for debt and preferred equity investments at the earlier of the date at which payments become 90 days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. Income recognition is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

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PART II

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

recovery of income and principal becomes doubtful. Income recognition is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our tenants to make required payments. If the financial condition of a specific tenant were to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required.

Reserve for Possible Credit Losses

The expense for possible credit losses in connection with debt and preferred equity investments is the charge to earnings to increase the allowance for possible credit losses to the level that we estimate to be adequate, based on Level 3 data, considering delinquencies, loss experience and collateral quality. Other factors considered relate to geographic trends and product diversification, the size of the portfolio and current economic conditions. Based upon these factors, we establish the provision for possible credit losses on each individual investment. When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired.

Where impairment is indicated on an investment that is held to maturity, a valuation allowance is measured based upon the excess of the recorded investment amount over the net fair value of the collateral. Any deficiency between the carrying amount of an asset and the calculated value of the collateral is charged to expense. The write-off of the reserve balance is called a charge-off. We recorded approximately $103.90 million, $1910.89 million and $3819.4 8 million in loan loss reserves and charge offs during the years ended December 31, 2012, 2011, ~~2010~~ and ~~2009~~2010, respectively, on investments being held to maturity. During the year ended December 31, ~~and none~~2010, ~~$1.0 million~~we recorded loan loss reserves and charge-offs of $~~69.~~1.0 million against our held for sale investment ~~during the years ended December 31, 2011, 2010 and 2009, respectively~~. We also recorded approximately $2.4 million, $4.4 million and $3.7 million in recoveries during the years ended December 31, 2012, 2011 and 2010, respectively, in connection with the sale of our investments.

Debt and preferred equity investments held for sale are carried at the lower of cost or fair market value using available market information obtained through consultation with dealers or other originators of such investments as well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management may conclude not to sell an investment designated as held for sale. In such situations, the ~~loan~~investment will be reclassified at its net carrying value to debt and preferred equity investments held to maturity. For these reclassified loans, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the ~~loan~~investment.

Derivative Instruments

In the normal course of business, we use a variety of derivative instruments to manage, or hedge, interest rate risk. We require that hedging derivative instruments be effective in reducing the interest rate risk exposure that they are designated to hedge. ~~This~~if ~~effectiveness~~the hedge is ~~essential~~to ~~for~~qualify ~~qualifying~~ for hedge accounting. Some derivative instruments are associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction occurs. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract.

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PART II

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

To determine the fair values of derivative instruments, we use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. For the majority of financial instruments including most derivatives, long-term investments and long-term debt, standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

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Results of Operations

Comparison of the year ended December 31, 2012 to the year ended December 31, 2011

The following comparison for the year ended December 31, 2012, or 2012, to the year ended December 31, 2011, or 2011, makes reference to the following: (i) the effect of the "Same-Store Properties," which represents all operating properties owned by us in the same manner at January 1, 2011 and at December 31, 2012 and totaled 46 of our 52 consolidated properties, representing approximately 72% of our share of annualized rental revenue, (ii) the effect of the "Acquisitions," which represents all properties or interests in properties acquired in 2011 and 2012 and all non-Same-Store Properties, including properties deconsolidated during the period, and (iii) "Other," which represents corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc. Assets classified as held for sale, are excluded from the following discussion.

Rental Revenues (in millions)	2012		2011		$ Change

Rental revenue	$	1,078.0	$	961.9	$	116.1	12.1	%
Escalation and reimbursement revenue		167.4		145.6		21.8	15.0

Total	$	1,245.4	$	1,107.5	$	137.9	12.5	%

Same-Store Properties	$	984.1	$	980.9	$	3.2	0.3	%
Acquisitions		247.1		125.4		121.7	97.0
Other		14.2		1.2		13	1,083.3

Total	$	1,245.4	$	1,107.5	$	137.9	12.5	%

Occupancy in the Same-Store Properties was 90.3% at December 31, 2012 and 89.6% at December 31, 2011. The increase in rental revenue from the Acquisitions is primarily due to owning these properties during 2012 compared to a partial period or not being included in 2011.

Occupancy for our same-store Manhattan portfolio at December 31, 2012 was 93.0% as compared to 92.0% for the same period in the previous year. During the year ended December 31, 2012, we signed 215 office leases in our Manhattan portfolio totaling 3,660,242 square feet. Eighty leases totaling 697,710 square feet represented office leases that replaced previous vacancies, while 135 office leases comprising 2,962,532 square feet had average starting rents of $56.16 per rentable square foot, representing a 7.5% increase over the previously fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed during the year ended December 31, 2012 was 12.5 years and average tenant concessions were 6.2 months of free rent with a tenant improvement allowance and lease commissions of $58.92 per rentable square foot. Of the 3,195,392 square feet of office leases which commenced during 2012, 506,131 square feet represented office leases that replaced previous vacancies, while 2,689,261 million square feet represented office leases that had average starting rents of $54.84 per rentable square foot, representing a 6.9% increase over the previously fully escalated rents on the same office spaces.

Occupancy for our Suburban portfolio was 79.9% at December 31, 2012 as compared to 80.5% for the same period in the previous year. During the year ended December 31, 2012, we signed 107 office leases in the Suburban portfolio totaling 635,370 square feet. Thirty-six leases and 117,188 square feet represented office leases that replaced previous vacancies, while 71 office leases comprising 518,182 square feet had average starting rents of $29.44 per rentable square foot, representing a 10.2% decrease over the previously fully escalated rents on the same office spaces. The average lease term on the Suburban office leases signed during the year ended December 31, 2012 was 5.0 years and average tenant concessions were 4.9 months of free rent with a tenant improvement allowance and lease commissions of $17.71 per rentable square foot. Of the 638,077 square feet of office leases which

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commenced during 2012, 132,634 square feet represented office leases that replaced previous vacancies, while 505,443 square feet represented office leases that had average starting rents of $29.14 per rentable square foot, representing a 10.9% decrease over the previously fully escalated rents on the same office spaces.

At December 31, 2012, approximately 5.9% and 10.3% of the space leased at our consolidated Manhattan and Suburban properties, respectively, is expected to expire during 2013. We estimate that the current market rents on these expected 2013 lease expirations at our consolidated Manhattan and Suburban properties would be approximately 8.6% and 1.4% higher, respectively, than then existing in-place fully escalated rents. We estimate that the current market rents on all our consolidated Manhattan and Suburban properties are approximately 13.7% and 1.5% higher, respectively, than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years.

The increase in rental revenue and escalation and reimbursement revenue on a consolidated basis was also due in large part to the consolidation of our interest in the west coast office portfolio for the months of August and September 2012, during which time we owned approximately 63.18% of the equity in the joint venture and controlled its activities. We recognized approximately $15.8 million in revenues during these periods. Following the recapitalization transaction, we no longer control the joint venture and have accounted for our investment under the equity method as of September 28, 2012.

The increase in escalation and reimbursement revenue was due to higher recoveries at the Acquisitions ($21.6 million) and Other properties ($1.6 million) which were offset by lower recoveries at the Same-Store Properties ($1.4 million). The decrease in recoveries at the Same-Store Properties was primarily due to lower operating expense escalations ($4.8 million) and electric reimbursements ($0.4 million), which were partially offset by higher real estate tax recoveries ($3.8 million).

Same-Store net operating income, which is Same-Store revenues plus Same-Store other income less Same-Store operating expenses, decreased $7.1 million, or 1.2%, from $582.0 million for the year ended December 31, 2011 to $574.9 million for the year ended December 31, 2012.

Investment and Other Income (in millions)	2012		2011		$ Change

Equity in net income of unconsolidated joint ventures	$	76.4	$	1.6	$	74.8		4,675.0	%
Investment and preferred equity income		119.2		120.4		(1.2	)	(1.0	)
Other income		35.7		35.5		0.2		0.6

Total	$	231.3	$	157.5	$	73.8		46.9	%

The increase in equity in net income of unconsolidated joint ventures was primarily due to higher net income contributions primarily from our investments in 717 Fifth Avenue ($69.9 million), which was primarily due to the receipt of refinancing proceeds in excess of our basis, The Meadows ($10.2 million), which was due mainly to repayment of the old debt at a discount, 280 Park Avenue ($8.0 million) which underlying property was only acquired by the joint venture in May 2011 as a result of a recapitalization transaction, 100 Park Avenue ($2.9 million) and 388 Greenwich Street ($2.2 million). This was partially offset by lower net income contributions from 1515 Broadway ($6.2 million), which we consolidated in April 2011, 1 Jericho Plaza ($1.4 million), which was due to our share of a lease termination payment, 450 West 33^rd Street ($1.1 million), which we consolidated in November 2011, the west coast office portfolio ($5.0 million), which was consolidated for the months of August and September and was accounted under the equity method of accounting for investment as of September 28, 2012 as a result of a recapitalization transaction, and 3 Columbus Circle ($1.1 million). Occupancy at our joint venture properties was 92.9% at December 31, 2012 and 94.0% at December 31, 2011. At December 31, 2012, approximately 1.5% and 17.1% of the space leased at our Manhattan and Suburban joint venture properties are expected to expire during 2013. We estimate that

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current market rents on these expected 2013 lease expirations at our Manhattan and Suburban joint venture properties are approximately 20.6% higher and 1.6% lower, respectively, than then existing in-place fully escalated rents.

Investment and preferred equity income decreased slightly during 2012 primarily due to additional income of $43.0 million recognized during the year ended December 31, 2011 upon sale or repayment of loans (inclusive of the 280 Park Avenue transaction) offset by an increase in loan originations in 2012. During 2012, we originated or purchased $637.1 million of new debt investments at a weighted average current yield of 9.3%. In addition, an entity that holds the property which served as collateral for our loan position, which is collateralized by a property in London, was determined to be a VIE under a reconsideration event and we have been determined to be the primary beneficiary. As a result of this determination, we consolidated the entity and reclassified the investment to assets held for sale on the consolidated balance sheet in June 2012. We recognized additional income of $5.2 million in 2012 as a result of this transaction. The weighted average investment balance outstanding and weighted average yield were $1.1 billion and 9.8%, respectively, for 2012 compared to $809.1 million and 7.9%, respectively, for 2011. As of December 31, 2012, the debt and preferred equity investments had a weighted average term to maturity of approximately 2.2 years.

The increase in other income was primarily due to a higher contribution from Service Corporation ($2.1 million), real estate tax refunds from some of our properties ($2.0 million), and one-time acquisition fees ($2.1 million) in connection with our investments in 33 Beekman and 10 East 53^rd Street. This increase was offset by a reduction in fees received upon the completion of a special servicing assignment ($6.6 million).

Property Operating Expenses (in millions)	2012		2011		$ Change

Operating expenses	$	298.3	$	263.7	$	34.6	13.1	%
Real estate taxes		210.5		174.5		36.0	20.6
Ground rent		37.9		32.9		5.0	15.2

Total	$	546.7	$	471.1	$	75.6	16.0	%

Same-Store Properties	$	416.9	$	405.8	$	11.1	2.7	%
Acquisitions		112.0		54.1		57.9	107.0
Other		17.8		11.2		6.6	58.9

Total	$	546.7	$	471.1	$	75.6	16.1	%

The increase in operating expenses on a consolidated basis was also due to the consolidation of our interest in the west coast office portfolio for the months of August and September, which contributed approximately $9.0 million in operating expenses, including real estate taxes.

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The increase in operating expenses at the Same-Store Properties was primarily due to higher real estate taxes ($7.5 million), payroll costs ($2.5 million), ground rent ($4.9 million) and contract maintenance ($1.1 million). This was partially offset by lower utility costs ($5.2 million).

Other Expenses (in millions)	2012		2011		$ Change

Interest expense, net of interest income	$	350.0	$	300.0	$	50.0		16.7	%
Depreciation and amortization expense		332.0		277.3		54.7		19.7
Loan loss and other investment reserves, net of recoveries		0.6		6.7		(6.1	)	(91.0	)
Transaction related costs		5.6		5.6		—		—
Marketing, general and administrative expense		82.8		80.1		2.7		3.4

Total	$	771.0	$	669.7	$	101.3		15.1	%

The increase in interest expense was primarily attributable to higher average consolidated debt balances outstanding during the period due to the refinancing of 1515 Broadway ($17.7 million) in April 2012, 100 Church Street ($3.2 million) in June 2012 and 919 Third Avenue ($5.7 million) in June 2011, and increase in investment activity inclusive of the acquisitions of Stonehenge properties ($4.6 million) in January 2012, 180 Maiden Lane ($6.7 million) in November 2011 and 110 East 42^nd Street ($2.3 million) in May 2011 subject to mortgages encumbering these properties. The consolidation of our interest in the west coast office portfolio for the months of August and September also contributed to the increase in interest expense by $6.6 million. The weighted average debt balance outstanding increased from $5.8 billion during the year ended December 30, 2011 to $6.5 billion during the year ended December 31, 2012. The weighted average interest rate remained flat at 4.87% for each of the years ended December 31, 2011 and 2012.

Loan loss and other investment reserves decreased year over year. We recorded $3.0 million in reserves and $2.4 million in recoveries in 2012 compared to $11.1 million in reserves and $4.4 million in recoveries in 2011.

Marketing, general and administrative expenses were $82.8 million or 5.1% of total revenues, including our share of joint venture revenues, in 2012 compared to $80.1 million or 5.4% in 2011.

Comparison of the year ended December 31, 2011 to the year ended December 31, 2010

The following comparison for the year ended December 31, 2011, or 2011, to the year ended December 31, 2010, or 2010, makes reference to the following: (i) the effect of the "Same-Store Properties," which represents all operating properties owned by us in the same manner at January 1, 2010 and at December 31, 2011 and totaled 45 of our 51 consolidated properties, representing approximately 68% of our share of annualized rental revenue, (ii) the effect of the "Acquisitions," which represents all properties or interests in properties acquired in 2010 and 2011 and all non-Same-Store Properties, including properties deconsolidated during the period, and (iii) "Other," which represents corporate level items not allocable to specific properties, as well as the Service ~~Corporation and eEmerge. Assets classified as held for sale, are excluded from the following discussion.~~

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Corporation and eEmerge Inc. Assets classified as held for sale, are excluded from the following discussion.

Rental Revenues (in millions)	2011		2010		$ Change

Rental revenue	$	961.9	$	782.5	$	179.4		22.9	%
Escalation and reimbursement revenue		145.6		118.2		27.4		23.2

Total	$	1,107.5	$	900.7	$	206.8		23.0	%

Same-Store Properties	$	880.0	$	873.3	$	6.7		0.8	%
Acquisitions		226.3		24.1		202.2		839.0
Other		1.2		3.3		(2.1	)	(63.6	)

Total	$	1,107.5	$	900.7	$	206.8		23.0	%

Occupancy in the Same-Store Properties was 90.3% at December 31, 2011 and 89.4% at December 31, 2010. The increase in rental revenue from the Acquisitions is primarily due to owning these properties during 2011 compared to a partial period or not being included in 2010.

Occupancy for our same-store Manhattan portfolio at December 31, 2011 was 94.0 percent as compared to 92.7 percent for the same period in the previous year. During the year ended December 31, 2011, we signed 205 office leases in our Manhattan portfolio totaling 2.3 million square feet. Forty-three leases totaling 614,833 square feet represented office leases that replaced previous vacancies, while 162 office leases comprising 1,690,423 square feet had average starting rents of $55.34 per rentable square foot, representing a 7.3 percent increase over the previously fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed during the year ended December 31, 2011 was 9.6 years and average tenant concessions were 3.7 months of free rent with a tenant improvement allowance and lease commissions of $49.59 per rentable square foot. Of the 2.0 million square feet of office leases which commenced during 2011, 434,018 square feet represented office leases that replaced previous vacancies, while 1.6 million square feet represented office leases that had average starting rents of $53.37 per rentable square foot, representing a 4.3 percent increase over the previously fully escalated rents on the same office spaces.

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that had average starting rents of $53.37 per rentable square foot, representing a 4.3 percent increase over the previously fully escalated rents on the same office spaces.

Occupancy for our Suburban portfolio was 86.2 percent at December 31, 2011 as compared to 87.3 percent for the same period in the previous year. During the year ended December 31, 2011, we signed 109 office leases in the Suburban portfolio totaling 574,046 square feet. Thirty-three leases and 183,425 square feet represented office leases that replaced previous vacancies, while 76 office leases comprising 390,621 square feet had average starting rents of $33.86 per rentable square foot, representing a 2.5 percent decrease over the previously fully escalated rents on the same office spaces. The average lease term on the Suburban office leases signed during the year ended December 31, 2011was 7.3 years and average tenant concessions were 6.9 months of free rent with a tenant improvement allowance and lease commissions of $33.16 per rentable square foot. Of the 528,788 square feet of office leases which commenced during 2011, 107,595 square feet represented office leases that replaced previous vacancies, while 421,193 square feet represented office leases that had average starting rents of $33.75 per rentable square foot, representing a 2.8 percent decrease over the previously fully escalated rents on the same office spaces.

At December 31, 2011, approximately 4.1% and 11.6% of the space leased at our consolidated Manhattan and Suburban properties, respectively, is expected to expire during 2012. We estimated that the current market rents on these expected 2012 lease expirations at our consolidated Manhattan and Suburban properties would be approximately 12.7% and 3.6% higher, respectively, than then existing in-place fully escalated rents. We estimated that the current market rents on all our consolidated Manhattan and Suburban properties were approximately 10.9% and 3.0% higher, respectively, than the existing in-place fully escalated rents on leases that are scheduled to expire in all future years.

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The increase in escalation and reimbursement revenue was due to higher recoveries at the Acquisitions ($26.8 million) and Same-Store Properties ($0.9 million) which were offset by lower recoveries at the Other properties ($0.3 million). The increase in recoveries at the Same-Store Properties was primarily due to operating expense escalations ($2.3 million) which were partially offset by lower real estate tax recoveries ($1.0 million) and electric reimbursements ($0.4 million).

Investment and Other Income (in millions)	2011		2010		$ Change

Equity in net income of unconsolidated joint ventures	$	1.6	$	39.6	$	(38.0	)	(96.0	)%
Investment and preferred equity income		120.4		147.9		(27.5	)	(18.6	)
Other income		35.5		35.7		(0.2	)	(0.6	)

Total	$	157.5	$	223.2	$	(65.7	)	(29.4	)%

The decrease in equity in net income of unconsolidated joint ventures was primarily due to lower net income contributions from 800 Third Avenue ($0.7 million), 1221 Avenue of the Americas which was sold in May 2010 ($10.5 million), 1515 Broadway, which we consolidated in April 2011 ($7.8 million), 1552 Broadway ($1.3 million), 280 Park Avenue ($18.1 million) and 2 Herald Square ($5.9 million) and 885 Third Avenue ($7.1 million), both of which were acquired in December 2010. This was partially offset by higher net income contributions primarily from our investments in Jericho Plaza ($0.8 million), 1551 Broadway, due to a refinancing prior to the sale ($2.2 million), 3 Columbus Circle ($1.6 million), 450 West 33rd Street, a mezzanine debt joint venture ($1.1 million), 717 Fifth Avenue ($1.8 million), 180 Broadway ($1.2 million) and 600 Lexington Avenue ($4.2 million). Occupancy at our joint venture properties was 92.3% at December 31, 2011 and 95.2% at December 31, 2010. At December 31, 2011, approximately 7.0% and 10.7% of the space leased at our Manhattan and Suburban joint venture properties are expected to expire during 2012. We estimated that current market rents on these expected 2012 lease expirations at our Manhattan and Suburban joint venture properties were approximately 29.5% higher and 5.7% lower, respectively, than then existing in-place fully escalated rents.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Occupancy at our joint venture properties was 92.3% at December 31, 2011 and 95.2% at December 31, 2010. At December 31, 2011, approximately 7.0% and 10.7% of the space leased at our Manhattan and Suburban joint venture properties are expected to expire during 2012. We estimated that current market rents on these expected 2012 lease expirations at our Manhattan and Suburban joint venture properties were approximately 29.5% higher and 5.7% lower, respectively, than then existing in-place fully escalated rents.

Investment and preferred equity income decreased during 2011. In 2011, debt investments totaling $352.8 million (inclusive of the 280 Park Avenue transaction) were sold or repaid resulting in the recognition of additional income of $43.0 million during 2011. In September 2010, 510 Madison Avenue was sold by the owner. The first mortgage loan and senior mezzanine loan, which we had purchased in December 2009 and February 2010 for $180.5 million in the aggregate, were repaid at par. We recognized additional income upon the repayment of the loans of approximately $64.8 million. During 2011, we also originated or purchased $615.0 million of new debt investments at a weighted average current yield of 10.0%. The weighted average investment balance outstanding and weighted average yield were $809.1 million and 7.9%, respectively, for 2011 compared to $862.0 million and 8.5%, respectively, for 2010. As of December 31, 2011, the debt and preferred equity investments had a weighted average term to maturity of approximately 3.0 years.

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The decrease in other income was primarily due to lower contribution from the Service Corporation ($2.4 million) and lower lease buy-out income ($1.6 million), which was partially offset by an increase in other fee income ($2.7 million).

Property Operating Expenses (in millions)	2011		2010		$ Change

Operating expenses	$	263.7	$	224.7	$	39.0		17.4	%
Real estate taxes		174.5		145.8		28.7		19.7
Ground rent		32.9		31.2		1.7		5.4

Total	$	471.1	$	401.7	$	69.4		17.3	%

Same-Store Properties	$	385.9	$	375.6	$	10.3		2.7	%
Acquisitions		74.0		12.8		61.2		478.1
Other		11.2		13.3		(2.1	)	(15.8	)

Total	$	471.1	$	401.7	$	69.4		17.3	%

Same-Store Properties operating expenses increased approximately $10.3 million. There were increases in real estate taxes ($4.4 million), payroll costs ($1.1 million), cleaning and repairs and maintenance ($4.7 million), ground rent ($1.7 million) and other expenses ($0.2 million). This was partially offset by decreases in utilities ($0.3 million) and insurance costs ($1.5 million).

Other Expenses (in millions)	2011		2010		$ Change

Interest expense, net of interest income	$	300.0	$	239.7	$	60.3		25.2	%
Depreciation and amortization expense		277.3		225.2		52.1		23.1
Loan loss and other investment reserves, net of recoveries		6.7		17.8		(11.1	)	(62.4	)
Transaction related costs		5.6		11.8		(6.2	)	(52.5	)
Marketing, general and administrative expense		80.1		75.9		4.2		5.5

Total	$	669.7	$	570.4	$	99.3		17.4	%

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The increase in interest expense was primarily attributable to higher average consolidated debt balances outstanding during the period due to the increase in investment activity in 2011, inclusive of the acquisitions of 1515 Broadway, 521 Fifth Avenue and 180 Maiden Lane. The weighted average debt balance outstanding increased from $4.8 billion during the year ended December 30, 2010 to $5.8 billion during the year ended December 31, 2011. The weighted average interest rate increased from 4.76% for the year ended December 31, 2010 to 4.87% for the year ended December 31, 2011.

Loan loss and other investment reserves decreased year over year. We recorded $11.1 million in reserves and $4.4 million in recoveries in 2011 compared to $17.8 million in reserves and no recoveries in 2010.

Marketing, general and administrative expense ~~represented~~were $80.1 million or 5.4% of total revenues, including our share of joint venture revenues, in 2011 compared to $75.9 million or 5.6% in 2010.

Comparison of the year ended December 31, 2010 to the year ended December 31, 2009

The following comparison for the year ended December 31, 2010, or 2010, to the year ended December 31, 2009, or 2009, makes reference to the following: (i) the effect of the "Same-Store Properties," which represents all operating properties owned by us at January 1, 2009 and at December 31, 2010, excluding properties which were sold or reclassified to assets held for sale in 2011 and total 43 of our 47 consolidated properties, representing approximately 70% of our share of annualized rental revenue, (ii) the effect of the "Acquisitions," which represents all properties or interests in properties acquired subsequent to January 1, 2009 and all non-Same-Store Properties, including properties deconsolidated during the period, and (iii) "Other," which represents corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge. Assets classified as held for sale, are excluded from the following discussion.

Rental Revenues (in millions)	2010		2009		$ Change
Rental revenue	$	782.5	$	746.6	$	35.9		4.8	%
Escalation and reimbursement revenue		118.2		119.0		(0.8	)	(0.7	)
Total	$	900.7	$	865.6	$	35.1		4.1	%
Same-Store Properties	$	855.3	$	851.4	$	3.9		0.5	%
Acquisitions		43.7		8.5		35.2		414.1
Other		1.7		5.7		(4.0	)	(70.2	)
Total	$	900.7	$	865.6	$	35.1		4.1	%

Our consolidated rental revenue increased primarily from the Acquisitions, which included 100 Church Street (January 2010) and 125 Park Avenue (August 2010). Occupancy in the Same-Store Properties was 91.5% at December 31, 2010 and 93.5% at December 31, 2009.

During the year ended December 31, 2010, we commenced 232 leases in the Manhattan portfolio totaling 2.4 million square feet, of which 194 leases and 2.3 million square feet represented office leases. Average starting Manhattan office rents of $43.17 per rentable square foot on 1.8 million square feet of office leases commenced during the year ended December 31, 2010 represented a 2.8% decrease over the previously fully escalated rents. The average lease term was 10.6 years and average tenant concessions were 4.8 months of free rent with a tenant improvement allowance of $35.04 per rentable square foot.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

During the year ended December 31, 2010, we commenced 117 leases in the Suburban portfolio totaling 899,000 square feet, of which 99 leases and 857,000 square feet represented office leases. Average starting Suburban office rents of $29.30 per rentable square foot on 695,000 square feet of office leases commenced during for the year ended December 31, 2010 represented a 9.8% decrease over the previously fully escalated rents. The average lease term was 6.8 years and average tenant concessions were 3.7 months of free rent with a tenant improvement allowance of $14.98 per rentable square foot.

At December 31, 2010, we estimated that the current market rents on our consolidated Manhattan properties and consolidated Suburban properties were approximately 5.0% and 5.1% higher, respectively, than then existing in-place fully escalated rents. Approximately 8.3% of the space leased at our consolidated properties expires during 2011.

The decrease in escalation and reimbursement revenue was due to lower recoveries at the Same-Store Properties ($4.0 million) which was partially offset by an increase in recoveries from the Acquisitions ($3.5 million). The decrease in recoveries at the Same-Store Properties was primarily due to lower electric reimbursements ($3.9 million) and operating expense and real estate tax escalations ($0.7 million) which were partially offset by other reimbursed expenses ($0.6 million).

Investment and Other Income (in millions)	2010		2009		$ Change
Equity in net income from unconsolidated joint ventures	$	39.6	$	62.9	$	(23.3	)	(37.0	)%
Investment and preferred equity income		147.9		65.6		82.3		125.5
Other income		35.7		47.1		(11.4	)	(24.2	)
Total	$	223.2	$	175.6	$	47.6		27.1	%

The decrease in equity in net income of unconsolidated joint ventures was primarily due to lower net income contributions from 1221 Avenue of the Americas due to the sale of our 45% beneficial interest in this joint venture in May 2010 ($21.2 million), 521 Fifth Avenue ($1.2 million), 600 Lexington Avenue due to the expensing of transaction related costs ($3.6 million) and 1515 Broadway ($5.2 million). This was partially offset by higher net income contributions primarily from our investments in 100 Park Avenue ($3.8 million), 141 Fifth Avenue ($1.2 million), 29 West 34th Street ($1.0 million) and Gramercy ($3.5 million).

Occupancy at our joint venture properties was 95.0% at December 31, 2010 and 95.1% at December 31, 2009. At December 31, 2010, we estimated that current market rents at our Manhattan and Suburban joint venture properties were approximately 16.3% and 9.3% higher, respectively, than then existing in-place fully escalated rents. Approximately 3.7% of the space leased at our joint venture properties expires during 2011.

Preferred equity and investment income increased primarily due to additional income generated upon the repayment of loans as well as new investment activity. In addition, in September 2010, 510 Madison Avenue was sold by the owner. The first mortgage loan and senior mezzanine loan, which we had purchased in December 2009 and February 2010 for $180.5 million in the aggregate, were repaid at par. We recognized additional income upon the repayment of the loans of approximately $64.8 million. The income was recorded in preferred equity and investment income on the accompanying statement of income. In addition, the weighted average investment balance outstanding and weighted average

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

yield were $862.0 million and 8.5%, respectively, for 2010 compared to $652.9 million and 8.4%, respectively, for 2009.

The decrease in other income was primarily due to lower fee income earned ($11.2 million).

Property Operating Expenses (in millions)	2010		2009		$ Change
Operating expenses	$	224.7	$	209.3	$	15.4		7.4	%
Real estate taxes		145.8		136.6		9.2		6.7
Ground rent		31.2		31.8		(0.6	)	(1.9	)
Total	$	401.7	$	377.7	$	24.0		6.4	%
Same-Store Properties	$	365.0	$	359.5	$	5.5		1.5	%
Acquisitions		24.6		4.2		20.4		485.7
Other		12.1		14.0		(1.9	)	(13.6	)
Total	$	401.7	$	377.7	$	24.0		6.4	%

Same-Store Properties operating expenses, excluding real estate taxes, increased approximately $1.4 million. There were increases in payroll costs ($3.1 million) and repairs and maintenance ($1.5 million). This was partially offset by decreases in utilities ($2.5 million) and ground rent ($0.7 million).

The increase in real estate taxes attributable to the Same-Store Properties ($4.1 million) due to higher assessed property values and increased tax rates.

Other Expenses (in millions)	2010		2009		$ Change
Interest expense, net of interest income	$	239.7	$	239.7	$	—		—	%
Depreciation and amortization expense		225.2		220.4		4.8		2.2
Loan loss and other investment reserves, net of recoveries		17.8		150.5		(132.7	)	(88.2	)
Transaction related costs		11.9		—		11.9		100.0
Marketing, general and administrative expense		75.9		74.0		1.9		2.6
Total	$	570.5	$	684.6	$	(114.1	)	(16.7	)%

The decrease in interest expense was primarily attributable to the early repurchase of our exchangeable and non-exchangeable notes and the reduction of the outstanding balance on our 2007 unsecured revolving credit facility which was partially offset by the issuance of new exchangeable and non-exchangeable notes. The weighted average debt balance decreased from $5.1 billion as of December 31, 2009 to $4.8 billion as of December 31, 2010, while the weighted average interest rate increased from 4.3% for the year ended December 31, 2009 to 4.76% for the year ended December 31, 2010.

We expensed approximately $11.9 million of transaction related costs during the year ended December 31, 2010. Transaction related costs included approximately $1.8 million for non-recoverable costs incurred in connection with the pursuit of a redevelopment project.

Marketing, general and administrative expense represented 6.9% of total revenues in 2010 compared to 7.4% in 2009.

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PART II

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital and funds for acquisition and redevelopment of properties, tenant improvements, leasing costs, repurchases or repayments of outstanding indebtedness (which may include exchangeable debt) and for debt and preferred equity investments will include:

(1): Cash flow from operations;

Cash flow from operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent and operating escalations and recoveries from our tenants and the level of operating and other costs. Additionally, we believe that our joint venture investment programs will also continue to serve as a source of capital. 51

Our combined aggregate principal maturities of our property mortgages and other loans payable, corporate obligations and our share of joint venture debt, including as-of-right extension options, as of December 31, 2011 are as follows (in thousands):

	2012		2013		2014		2015		2016		Thereafter		Total
Property Mortgages and loans	$	52,443	$	568,649	$	647,776	$	270,382	$	556,400	$	2,278,190	$	4,373,840
Corporate obligations		119,423		—		98,578		657		624,804		877,194		1,720,656
Joint venture debt-our share		176,457		93,683		123,983		102,476		527,814		800,102		1,824,515
Total	$	348,323	$	662,332	$	870,337	$	373,515	$	1,709,018	$	3,955,486	$	7,919,011

As of December 31, 2011, we had approximately $163.5 million of cash on hand, inclusive of approximately $25.3 million of marketable securities. We expect to generate positive cash flow from operations for the foreseeable future. We may seek to access private and public debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured debt, will allow us to satisfy our debt obligations, as described above, upon maturity, if not before.

We also have investments in several real estate joint ventures with various partners who we consider to be financially stable and who have the ability to fund a capital call when needed. Most of our joint ventures are financed with non-recourse debt. We believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.

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(2): Cash on hand;
(3): Borrowings under our 2012 credit facility;
(4): Other forms of secured or unsecured financing by us or SL Green;
(5): Net proceeds from divestitures of properties and redemptions, participations and dispositions of debt and preferred equity investments; and
(6): Proceeds from common or preferred equity or debt offerings by us (including issuances of units of limited partnership interest and trust preferred securities), SL Green or ROP.

Cash ~~PART~~flow IIfrom operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent and operating escalations and recoveries from our tenants and the level of operating and other costs. Additionally, we believe that our debt and preferred equity investment program will continue to serve as a source of capital.

The combined ~~ITEM~~aggregate ~~7. Management's~~principal ~~Discussion~~maturities of our property mortgages and ~~Analysis~~other ofloans ~~Financial~~payable, ~~Condition~~corporate obligations and ~~Results~~our share of ~~Operations~~joint venture debt, including as-of-right extension options, as of December 31, 2012 are as follows (in thousands):

	2013		2014		2015		2016		2017		Thereafter		Total

Property mortgages and other loans	$	348,505	$	198,788	$	285,347	$	572,053	$	1,153,525	$	2,057,246	$	4,615,464
Corporate obligations		—		75,898		7		255,165		304,266		1,269,620		1,904,956
Joint venture debt-our share		176,511		309,090		36,457		528,278		933,634		151,391		2,135,361

Total	$	525,016	$	583,776	$	321,811	$	1,355,496	$	2,391,425	$	3,478,257	$	8,655,781

As of December 31, 2012, we had approximately $211.4 million of consolidated cash on hand, inclusive of approximately $21.4 million of marketable securities. We expect to generate positive cash flow from operations for the foreseeable future. We may seek to access private and public debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured debt, will allow us to satisfy our debt obligations, as described above, upon maturity, if not before.

Cash Flows

The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 8. Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

Cash and cash equivalents were $138.2 million and $332.8 million at December 31, 2011 and 2010, respectively, representing a decrease of $194.6 million. The decrease was a result of the following changes in cash flows (in thousands): 52

	Year ended December 31,
	2011			2010			Increase (Decrease)
Net cash provided by operating activities	$	312,860		$	321,058		$	(8,198	)
Net cash (used in) provided by investing activities	$	(739,597	)	$	18,815		$	(758,412	)
Net cash provided by (used in) financing activities	$	232,099		$	(350,758	)	$	582,857

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~~Our principal~~Cash ~~source~~and ~~of operating~~ cash ~~flow~~equivalents iswere ~~related to the leasing and operating of the properties in our portfolio~~$190.0 million ~~Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service~~ and ~~fund quarterly dividend and distribution payment requirements~~$138.2 million Atat December 31, 2012 and 2011, ~~our~~respectively, ~~portfolio~~representing ~~was~~an ~~91.2%~~increase of ~~occupied~~$51.8 million. ~~Our~~The ~~debt~~increase ~~and~~was ~~preferred~~a ~~equity~~result ~~and~~of ~~joint~~the ~~venture~~following ~~investments~~changes ~~also~~in ~~provide a steady stream of operating~~ cash ~~flow~~flows to(in ~~us.~~thousands):

Cash is used in investing activities to fund acquisitions, redevelopment projects and recurring and nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings that meet our investment criteria. During the year ended December 31, 2011, when compared to the year ended December 31, 2010, we used cash primarily for the following investing activities (in thousands):

	Year ended December 31,

	2012			2011			Increase (Decrease)
Net cash provided by operating activities	$	353,743		$	312,860		$	40,883
Net cash used in investing activities	$	(1,170,393	)	$	(739,597	)	$	(430,796	)
Net cash provided by financing activities	$	868,442		$	232,099		$	636,343

Acquisitions of real estate	$	(176,142	)
Capital expenditures and capitalized interest		(50,955	)
Escrow cash-capital improvements/acquisition deposits		69,496
Joint venture investments		(22,076	)
Distributions from joint ventures		59,439
Proceeds from sales of real estate/partial interest in property		(462,573	)
Debt and preferred equity and other investments		(175,601	)
Increase in net cash provided by investing activities	$	(758,412	)

Our principal source of operating cash flow is related to the leasing and operating of the properties in our portfolio. Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund quarterly dividend and distribution payment requirements. At December 31, 2012, our portfolio was 91.4% occupied. Our debt and preferred equity and joint venture investments also provide a steady stream of operating cash flow to us.

~~Funds~~Cash ~~spent~~is onused ~~capital~~in ~~expenditures,~~investing ~~which~~activities ~~comprise~~to ~~building~~fund acquisitions, redevelopment projects and ~~tenant~~recurring ~~improvements,~~and ~~increased~~nonrecurring ~~from~~capital ~~$108~~expenditures.~~1 million~~ ~~for~~We ~~the~~selectively ~~year~~invest ~~ended~~in ~~December 31,~~new ~~2010~~projects tothat enable ~~$159.1 million~~us ~~for~~to ~~the~~take ~~year~~advantage ~~ended~~of ~~December 31~~our development, ~~2011.~~leasing, ~~The~~financing ~~increased~~and ~~capital~~property ~~expenditures~~management ~~relate~~skills ~~primarily~~and toinvest ~~costs~~in ~~incurred~~existing inbuildings ~~connection~~that ~~with~~meet our investment criteria. During the ~~redevelopment~~year ofended ~~properties~~December 31, 2012, ~~and~~when compared to the ~~build-out~~ ofyear ~~space~~ended December 31, 2011, we used cash primarily for ~~tenants~~the ~~resulting~~following ~~from~~investing ~~leasing~~activities ~~activity.~~(in thousands):


Acquisitions of real estate	$	(97,812	)
Capital expenditures and capitalized interest		10,952
Escrow cash-capital improvements/acquisition deposits		(99,361	)
Joint venture investments		(105,254	)
Distributions from joint ventures		15,517
Proceeds from sales of real estate/partial interest in property		17,937
Debt and preferred equity and other investments		(172,775	)

Increase in net cash used by investing activities	$	(430,796	)

Funds spent on capital expenditures, which comprise building and tenant improvements, decreased from $159.1 million for the year ended December 31, 2011 to $148.1 million for the year ended December 31, 2012. The decreased capital expenditures relate primarily to lower costs incurred in connection with the redevelopment of properties and the build-out of space for tenants resulting from leasing activity.

We generally fund our investment activity through property-level financing, our 2012 credit facility, senior unsecured notes, convertible or exchangeable securities, construction loans, sale of real estate and from time to time, we issue common or preferred units of limited partnership interest. During the

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year ~~PART~~ended IIDecember 31, 2012, when compared to the year ended December 31, 2011, we used cash for the following financing activities (in thousands):

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations


Proceeds from our debt obligations	$	254,579
Repayments under our debt obligations		538,903
Proceeds from issuance of common and preferred units		(92,924	)
Redemption of preferred units		(200,013	)
Noncontrolling interests, contributions in excess of distributions		147,526
Other financing activities		48,213
Dividends and distributions paid		(59,941	)

Increase in net cash provided in financing activities	$	636,343

We fund our investment activity through various sources including property-level financing, our 2011 revolving credit facility, senior unsecured notes, convertible or exchangeable securities, construction loans, asset sales and from time to time, we issue common or preferred stock. During the year ended December 31, 2011, when compared to the year ended December 31, 2010, we used cash for

Proceeds from our debt obligations	$	1,887,716
Repayments under our debt obligations		(1,612,064	)
Proceeds from issuance of common stock		516,168
Proceeds from issuance of preferred stock		(122,041	)
Redemption of noncontrolling interests		13,012
Noncontrolling interests, contributions in excess of distributions		(133,093	)
Other financing activities		38,041
Dividends and distributions paid		(4,882	)
Increase in cash used in financing activities	$	582,857

Capitalization

As of December 31, ~~2011~~2012, we had 8594,~~782~~009,~~723~~390 ~~general~~total ~~and~~units of limited ~~partner~~partnership ~~common~~interest, ~~units~~91,249,632 of which were held by SL Green, and 2,~~764~~759,~~737~~758 ~~limited~~of ~~partner~~which ~~common~~were held by third parties, 66,668 performance-based LTIP units, 11 7,700,000 units of our 7.625% Series C cumulative redeemable preferred units, or Series C preferred units, 4and 9,~~000~~200,000 units of our 76.~~875~~50% Series DI cumulative redeemable preferred units, or Series DI preferred units, ~~and 80,000 units of our Series H preferred units~~ outstanding. In addition, we also had preferred units of limited partnership interests having aggregate liquidation preferences of $3349.86 million held by persons other than the Company. Whenever SL Green issues common or preferred stock, the net proceeds received are contributed to us in exchange for an equivalent number of ~~operating~~units of limited partnership ~~units~~interest of a corresponding class.

In ~~2011,~~September we2012, ~~along~~the ~~with~~Company SLredeemed ~~Green~~4,000,000 ~~entered~~shares, ~~into~~or ~~"at-the-market"~~$100.0 million, ~~equity~~of ~~offering~~its ~~programs,~~Series C orpreferred ~~ATM~~stock ~~programs,~~at toa ~~sell~~redemption anprice ~~aggregate~~ of $~~775~~25.~~0 million~~00 ofper ~~SL Green's~~share ~~common~~plus ~~stock~~$0.3707 Asin accumulated ofand ~~December~~unpaid dividends on such preferred stock through September 3124, ~~2011,~~2012. SLThe ~~Green~~Company ~~had~~recognized ~~sold~~ $6.73 million ~~shares~~ of ~~its~~costs ~~common~~to ~~stock~~partially ~~through~~redeem the ~~ATM~~Series C ~~programs~~preferred ~~for~~stock, which ~~aggregate~~is ~~gross~~included ~~proceeds~~in ofpreferred ~~approximately $525.0 million~~unit ~~($517.1 million~~redemption ofcosts ~~net~~on ~~proceeds~~the ~~after~~consolidated ~~related~~statements ~~expenses)~~of income. ~~The~~Simultaneously ~~net~~with ~~proceeds~~that ~~were~~redemption, ~~used~~we toredeemed ~~repay~~an ~~debt,~~equal ~~fund~~number ~~new~~of ~~investments~~our ~~and~~Series C ~~for~~preferred ~~other~~units from ~~corporate~~the ~~purposes.~~Company ~~Net~~at ~~proceeds~~the ~~from these~~redemption ~~offerings~~price ~~(approximately~~paid ~~$517.1 million)~~by ~~were~~the ~~contributed~~Company to usthe ~~in exchange for 6.7~~Series ~~million~~C ~~common~~preferred ~~partnership units~~stockholders. As a result of ~~December 31,~~this ~~2011~~redemption, SLwe ~~Green~~have ~~had~~7,700,000 ~~$250.0~~Series C ~~million available~~preferred ~~to issue under the ATM programs~~units outstanding.

In August 2012, the Company issued 9,200,000 shares of its 6.50% Series I cumulative redeemable preferred stock, or the Series I preferred stock, with a mandatory liquidation preference of $25.00 per share. The Series I preferred shareholders receive annual distributions of $1.625 per unit paid on a quarterly basis and distributions are cumulative, subject to certain provisions. SL Green is entitled to redeem its 6.50% Series I cumulative redeemable preferred stock at par for cash at its option on or after August 10, 2017. The Series I preferred stock was recorded net of underwriters' discount and issuance costs. Net proceeds from this offering (approximately $222.2 million) were contributed to us by SL Green in exchange for 9.2 million Series I preferred units.

In July 2012, the Company redeemed all 4,000,000 shares, or $100.0 million, of its 7.875% Series D cumulative redeemable preferred stock, or Series D preferred stock, at a redemption price of $25.00 per share plus $0.4922 in accumulated and unpaid dividends on such preferred stock through July 14, 2012. The Company recognized $3.7 million of costs to fully redeem the Series D preferred stock, which is included in preferred unit redemption costs on the consolidated statements of income. Simultaneously with that redemption, we redeemed all of our Series D cumulative redeemable preferred units from the Company at the redemption price paid by the Company to the Series D preferred stockholders.

In July 2011, we, along with SL Green, entered into an "at-the-market" equity offering program, or ATM Program, to sell an aggregate of $250.0 million of SL Green's common stock. During the year ended December 31, 2012, SL Green sold 2.6 million shares of its common stock through the ATM

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Program for aggregate gross proceeds of approximately $204.6 million ($201.3 million of net proceeds after related expenses). The net proceeds were used to repay debt, fund new investments and for other corporate purposes. Net proceeds from these offerings (approximately $201.3 million) were contributed to us in exchange for 2.6 million common partnership units. As of December 31, 2012, SL Green had $45.4 million available to issue under the ATM Program.

Compensation Plans

All employees of SL Green are compensated through a subsidiary of SLGOP. SL Green's employee and director compensation plans are described below. Under each plan, whenever SL Green issues common or preferred stock, we issue an equivalent number of operating partnership units of a corresponding class to SL Green.

Dividend Reinvestment and Stock Purchase Plan

In March 2012, SL Green filed a registration statement with the SEC ~~registering~~for ~~2,000,000 shares of~~ its ~~common stock under its~~ dividend reinvestment and stock purchase plan, or DRIP, which automatically became effective upon filing. SL Green registered 3,500,000 shares of common stock under the DRIP. The DRIP commenced on September 24, 2001.

54 During the years ended December 31, 2012 and 2011, SL Green issued approximately 1.3 million and 473 shares of its common stock and received approximately $99.6 million and $34,000 of net proceeds, respectively, from dividend reinvestments and/or stock purchases under the DRIP. The $99.6 million in proceeds received during the year ended December 31, 2012 were contributed to us by SL Green in exchange for an equivalent number of common units of limited partnership interest. DRIP shares may be issued at a discount to the market price.

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PART II

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

During the years ended December 31, 2011 and 2010, approximately 473 and 250,900 shares of our common stock were issued and approximately $34,000 and $11.3 million of proceeds were received, respectively, from dividend reinvestments and/or stock purchases under the DRIP. The $34,000 in proceeds received during the year ended December 31, 2011 were contributed to us by SL Green in exchange for an equivalent number of common units. DRIP shares may be issued at a discount to the market price.

Second Amended and Restated 2005 Stock Option and Incentive Plan

Subject to adjustments upon certain corporate transactions or events, up to a maximum of 10,730,000 fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based awards under the Second Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan. AtAs of December 31, ~~2011~~2012, ~~approximately~~no ~~3.8 million~~ fungible units, ~~calculated on a weighted basis,~~ were available for issuance under the 2005 Plan, orafter ~~4.8 million~~reserving for shares ofunderlying SLoutstanding restricted stock units, phantom stock units granted pursuant to SL Green's ~~common~~ ~~stock~~Non-Employee ifDirectors' ~~all~~Deferral ~~shares~~Program ~~available~~and ~~under~~LTIP ~~the~~units, ~~2005~~including, ~~Plan~~among ~~were~~others, outstanding LTIP units issued asunder ~~five~~SL Green's 2011 Long-~~year~~Term ~~stock~~Outperformance ~~options~~Plan, which remain subject to performance-based vesting.

2003 Long-Term Outperformance Compensation Program

SL Green's board of directors adopted a long-term, seven-year compensation program for certain members of senior management. The program provided for restricted stock awards to be made to plan participants if the holders of its common equity achieved a total return in excess of 40% over a 48-month period commencing April 1, 2003. In April 2007, SL Green's compensation committee determined that under the terms of the 2003 Outperformance Plan, as of March 31, 2007, the performance hurdles had been met and the maximum performance pool of $22,825,000, taking into account forfeitures, was established. In connection with this event, approximately 166,312 shares of restricted stock (as adjusted for forfeitures) were allocated under the 2005 Plan. In accordance with the terms of the program, 40% of each award vested on March 31, 2007 and the remainder was scheduled to vest ratably over the subsequent three years based on continued employment. The fair value of the awards under this program on the date of grant was determined to be $3.2 million. This fair value is expensed over the term of the restricted stock award. Forty percent of the value of the award was amortized over four years from the date of grant and the balance was amortized, in equal parts, over five, six and seven years (i.e., 20% of the total value was amortized over five years (20% per year), 20% of the total value was amortized over six years (16.67% per year) and 20% of the total value was amortized over seven years (14.29% per year). We recorded compensation expense of $23,000 and $0.1 million related to this plan during the years ended December 31, 2010 and 2009, respectively. The cost of the 2003 Outperformance Plan had been fully expensed as of March 31, 2010.

2005 Long-Term Outperformance Compensation Program

In December 2005, the compensation committee of SL Green's board of directors approved a long-term incentive compensation program, the 2005 Outperformance Plan. Participants in the 2005 Outperformance Plan were entitled to earn LTIP Units in SLGOP if SL Green's total return to stockholders for the three-year period beginning December 1, 2005 exceeded a cumulative total return to stockholders of 30%.; provided that participants were entitled to earn LTIP Units earlier in the event that SL Green achieved maximum performance for 30 consecutive days. ~~The~~On ~~total~~June 14, ~~number~~2006, ofSL ~~LTIP~~Green's ~~Units~~compensation committee determined that ~~could~~under bethe terms of the 2005 Outperformance Plan, as of June 8, 2006, the performance period had accelerated and the maximum performance pool of $49,250,000, taking into account forfeitures, had been earned. ~~was~~Under tothe beterms aof ~~number~~the ~~having~~2005 anOutperformance ~~assumed~~Plan, participants also earned additional LTIP Units with a value equal to ~~10%~~the distributions that would have been paid with respect to the LTIP Units earned if such LTIP Units had been earned at the beginning of the ~~outperformance~~performance ~~amount~~period. inThe ~~excess~~total number of LTIP Units earned under the ~~30%~~2005 Outperformance Plan by all participants as of June 8, 2006 was 490,475. Under the terms of the 2005 ~~benchmark~~Outperformance Plan, all LTIP Units that were earned remained subject to atime-based ~~maximum~~vesting, ~~dilution~~with ~~cap~~one-third ~~equal~~of tothe LTIP Units earned vested on each of November 30, 2008 and

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the ~~PART~~first IItwo anniversaries thereafter based on continued employment. The earned LTIP Units received regular quarterly distributions on a per unit basis equal to the dividends per share paid on SL Green's common stock, whether or not they were vested.

The cost ~~ITEM~~of 7the 2005 Outperformance Plan (approximately $8. ~~Management's~~0 million, ~~Discussion~~subject ~~and~~to ~~Analysis~~adjustment for forfeitures) was amortized into earnings through the final vesting period. We recorded approximately $1.6 million of ~~Financial~~compensation ~~Condition~~expense ~~and~~during ~~Results~~the year ended December 31, 2010 in connection with the 2005 Outperformance Plan. The cost of ~~Operations~~the 2005 Outperformance Plan had been fully expensed as of June 30, 2010.

the lesser of 3% of SL Green's outstanding shares and units of limited partnership interest as of December 1, 2005 or $50.0 million. On June 14, 2006, SL Green's compensation committee determined that under the terms of the 2005 Outperformance Plan, as of June 8, 2006, the performance period had accelerated and the maximum performance pool of $49,250,000, taking into account forfeitures, had been earned. Under the terms of the 2005 Outperformance Plan, participants also earned additional LTIP Units with a value equal to the distributions that would have been paid with respect to the LTIP Units earned if such LTIP Units had been earned at the beginning of the performance period. The total number of LTIP Units earned under the 2005 Outperformance Plan by all participants as of June 8, 2006 was 490,475. Under the terms of the 2005 Outperformance Plan, all LTIP Units that were earned remained subject to time-based vesting, with one-third of the LTIP Units earned vested on each of November 30, 2008 and the first two anniversaries thereafter based on continued employment. The earned LTIP Units received regular quarterly distributions on a per unit basis equal to the dividends per share paid on SL Green's common stock, whether or not they were vested.

The cost of the 2005 Outperformance Plan (approximately $8.0 million, subject to adjustment for forfeitures) was amortized into earnings through the final vesting period. We recorded approximately $1.6 million and $2.3 million of compensation expense during the years ended December 31, 2010 and 2009, respectively, in connection with the 2005 Outperformance Plan. The cost of the 2005 Outperformance Plan had been fully expensed as of June 30, 2010.

2006 Long-Term Outperformance Compensation Program

In August 2006, the compensation committee of SL Green's board of directors approved a long-term incentive compensation program, the 2006 Outperformance Plan. The performance criteria under the 2006 Outperformance Plan were not met and, accordingly, no LTIP Units were earned under the 2006 Outperformance Plan.

The cost of the 2006 Outperformance Plan (approximately $16.4 million, subject to adjustment for forfeitures) was amortized into earnings through July 31, 2011, the final vesting period. We recorded compensation expense of approximately $70,000, ~~$0.2 million~~ and $0.42 million ~~of compensation expense~~ during the years ended December 31, 2011, ~~2010~~ and ~~2009~~2010, respectively, in connection with the 2006 Outperformance Plan. The ~~performance criteria under the 2006 Outperformance Plan were not met and, accordingly, no LTIP Units were earned under the 2006 Outperformance Plan. The~~ cost of the 2006 Outperformance Plan had been fully expensed as of September 30, 2011.

~~SL Green Realty Corp.~~ 2010 Notional Unit Long-Term Compensation Plan

In December 2009, the compensation committee of SL Green's board of directors approved the general terms of the SL Green Realty Corp. 2010 Notional Unit Long-Term Compensation Program, or the 2010 Long Term Compensation Plan. The 2010 Long-Term Compensation Plan is a long-term incentive ~~compensation~~ compensation plan pursuant to which award recipients ~~may~~could earn, in the aggregate, from approximately $15 million up to approximately $75 million of LTIP Units in SLGOP based on SL Green's stock price appreciation over three years beginning on December 1, 2009; provided that, if maximum performance ~~has~~had been achieved, approximately $25 million of awards could ~~may~~ be earned at any time after the beginning of the second year and an additional approximately $25 million of awards ~~may~~could be earned at any time after the beginning of the third year. ~~The~~In order ~~amount~~to ofachieve ~~awards~~maximum ~~earned~~performance ~~will range~~under ~~from~~the ~~approximately~~2010 ~~$15 million~~Long-Term ifCompensation Plan, SL Green's aggregate stock price appreciation during the performance period ishad 25to equal or exceed 50%. toSL Green's ~~the~~compensation committee determined that maximum ~~amount~~performance had been achieved at or shortly after the beginning of ~~approximately~~each ~~$75~~of the second and third years of the performance period and for the full performance period and, accordingly, 366,815 LTIP Units, 385,583 LTIP Units and 327,416 LTIP Units were earned under the 2010 Long-Term Compensation Plan in December 2010, 2011 and 2012, respectively. Substantially in accordance with the original terms of the program, 50% of these LTIP Units vested on December ~~million~~17, if2012 SL(accelerated from the original January 1, 2013 ~~Green's~~vesting date) and the remainder is scheduled to vest ratably on January 1, 2014 and 2015 based on continued employment. In accordance with the terms of the 2010 Long-Term Compensation Plan, distributions were not paid on any LTIP Units until they were earned, at which time we paid all distributions that would have been paid on the earned LTIP Units since the beginning of the performance period.

The cost of the 2010 Long Term Compensation Plan (approximately $31.7 million, subject to forfeitures) will be amortized into earnings through the final vesting period. We recorded compensation expense of approximately $10.7 million, $9.3 million and $4.0 million during the years ended December 31, 2012, 2011 and 2010, respectively, related to the 2010 Long-Term Compensation Plan.

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~~PART~~ II2011 Outperformance Plan

In ~~ITEM~~August 72011, the compensation committee of SL Green's board of directors approved the general terms of the SL Green Realty Corp. ~~Management~~ 2011 Outperformance Plan, or the 2011 Outperformance Plan. Participants in the 2011 Outperformance Plan may earn, in the aggregate, up to $85 million of LTIP Units in SLGOP based on SL Green's total ~~Discussion~~return to stockholders for the three-year period beginning September 1, 2011. Under the 2011 Outperformance Plan, participants will be entitled to share in a "performance pool" comprised of LTIP Units with a value equal to 10% of the amount, if any, by which SL Green's total return to stockholders during the three-year period exceeds a cumulative total return to stockholders of 25%, subject to the maximum of $85 million of LTIP Units; provided that if maximum performance has been achieved, approximately one-third of each award may be earned at any time after the beginning of the second year and ~~Analysis~~an additional approximately one-third of ~~Financial~~each ~~Condition~~award may be earned at any time after the beginning of the third year. LTIP Units earned under the 2011 Outperformance Plan will be subject to continued vesting requirements, with 50% of any awards earned vesting on August 31, 2014 and ~~Results~~the remaining 50% vesting on August 31, 2015, subject to continued employment with us through such dates. Participants will not be entitled to distributions with respect to LTIP Units granted under the 2011 Outperformance Plan unless and until they are earned. If LTIP Units are earned, each participant will also be entitled to the distributions that would have been paid had the number of ~~Operations~~earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of additional LTIP Units. Thereafter, distributions will be paid currently with respect to all earned LTIP Units, whether vested or unvested.

~~aggregate~~ The ~~stock~~cost ~~price~~of ~~appreciation during~~ the ~~performance~~2011 ~~period~~Outperformance isPlan ~~50%~~(approximately ~~or greater~~$26. ~~No awards will be earned if SL Green's aggregate stock price appreciation is less than 25%. After the awards are earned~~1 million, ~~they will remain~~ subject to ~~vesting,~~forfeitures) ~~with~~will ~~50%~~be ofamortized ~~any~~into ~~LTIP~~earnings ~~Units earned vesting on January 1, 2013 and an additional 25% vesting on each of January 1, 2014 and 2015 based, in each case, on continued employment~~ through the final vesting date. SL Green will not pay distributions on any LTIP Units until they are earned, at which time SL Green will pay all distributions that would have been paid on the earned LTIP Units since the beginning of the performance period. InWe ~~January 2011, SL Green's~~ recorded compensation ~~committee~~expense ~~determined that under the terms~~ of ~~the~~approximately ~~2010 Long Term Compensation Plan, as of December~~ $5,.5 million ~~2010, maximum performance had been achieved~~ and, ~~accordingly, approximately 366,815~~$0.1 ~~LTIP~~million ~~Units~~during ~~had been earned under~~ the ~~2010~~years ~~Long-Term~~ended ~~Compensation Plan. In January 2012, SL Green's compensation committee determined that under the terms of the 2010 Long Term Compensation Plan, as of~~ December 131, ~~2011,~~2012 ~~maximum performance had been achieved~~ and, ~~accordingly~~2011, ~~approximately 385~~respectively,~~583~~ ~~LTIP~~related ~~Units~~to ~~had been earned under~~ the ~~2010~~2011 ~~Long-Term~~Outperformance ~~Compensation~~ Plan. In accordance with the terms of the program, 50% of these LTIP Units will vest on January 1, 2013 and the remainder is scheduled to vest ratably over the subsequent two years based on continued employment.

Overall, the 2010 Long Term Compensation Plan contemplates maximum potential awards of 1,179,987 LTIP Units and a cap of approximately $75 million when earned. However, sufficient shares were not available under the 2005 Plan to fund the entire 2010 Long Term Compensation Plan in December 2009, and the awards granted at that time, in the aggregate, were limited to 744,128 LTIP Units, subject to performance-based and time-based vesting, unless and until additional shares became available under the 2005 Plan prior to the end of the performance period for the 2010 Long Term Compensation Plan. At SL Green's annual meeting of stockholders on June 15, 2010, SL Green's stockholders approved the adoption of the 2005 Plan which, among other things, increased the number of shares available under the plan. That increase allowed us to award the balance of the LTIP Units due under the 2010 Long-Term Compensation Plan. The remaining awards were granted in June 2010. The cost of the 2010 Long Term Compensation Plan (approximately $31.7 million, subject to forfeitures) will be amortized into earnings through the final vesting period. We recorded compensation expense of approximately $9.3 million, $4.0 million and $0.6 million during the years ended December 31, 2011, 2010 and 2009, respectively, related to this program.

SL Green Realty Corp. 2011 Outperformance Plan

In August 2011, the compensation committee of SL Green's board of directors approved the general terms of the SL Green Realty Corp. 2011 Outperformance Plan, or the 2011 Outperformance Plan. Participants in the 2011 Outperformance Plan may earn, in the aggregate, up to $85 million of LTIP Units in SLGOP based on SL Green's total return to stockholders for the three-year period beginning September 1, 2011. Under the 2011 Outperformance Plan, participants will be entitled to share in a "performance pool" comprised of LTIP Units with a value equal to 10% of the amount, if any, by which SL Green's total return to stockholders during the three-year period exceeds a cumulative total return to stockholders of 25%, subject to the maximum of $85 million of LTIP Units; provided that if maximum performance has been achieved, approximately one-third of each award may be earned at any time after the beginning of the second year and an additional approximately one-third of each award may be earned at any time after the beginning of the third year. LTIP Units earned under the 2011 Outperformance Plan will be subject to continued vesting requirements, with 50% of any awards earned vesting on August 31, 2014 and the remaining 50% vesting on August 31, 2015,

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

subject to continued employment with us through such dates. Participants will not be entitled to distributions with respect to LTIP Units granted under the 2011 Outperformance Plan unless and until they are earned. If LTIP Units are earned, each participant will also be entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of additional LTIP Units. Thereafter, distributions will be paid currently with respect to all earned LTIP Units, whether vested or unvested.

As of December 31, 2011, only 50% of the 2011 Outperformance Plan had been granted. The cost of the 2011 Outperformance Plan for the 50% granted (approximately $12.1 million, subject to forfeitures) will be amortized into earnings through the final vesting period. We recorded compensation expense of approximately $0.1 million during the year ended December 31, 2011 related to this program.

Deferred Stock Compensation Plan for Directors

Under SL Green's Independent Director's Deferral Program, which commenced July 2004, SL Green's non-employee directors may elect to defer up to 100% of their annual retainer fee, chairman fees and meeting fees. Unless otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The phantom stock units are convertible into an equal number of shares of SL Green's common stock upon such directors' termination of service from SL Green's board of directors or a change in control by SL Green, as defined by the program. Phantom stock units are credited to each non-employee director quarterly using the closing price of SL Green's common stock on the applicable dividend record date for the respective quarter. Each participating non-employee director's account is also credited for an equivalent amount of phantom stock units based on the dividend rate for each quarter.

During the year ended December 31, ~~2011~~2012, approximately 8,~~184~~307 phantom stock units were earned. As of December 31, ~~2011~~2012, there were approximately 6675,~~849~~156 phantom stock units outstanding.

Employee Stock Purchase Plan

On September 18, 2007, SL Green's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage its employees to increase their efforts to make its business more successful by providing equity-based incentives to eligible employees. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the ~~Internal Revenue~~ Code ~~of 1986~~, ~~as amended,~~ and has been adopted by the board to enable eligible employees to purchase SL Green's shares of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to adjustment upon a merger, reorganization, stock split or other similar corporate change. SL Green filed a registration statement on Form S-8 with the ~~Securities~~SEC ~~Exchange Commission~~ with respect to the ESPP. The common stock is offered for purchase through a series of successive ~~offering periods. Each offering period will be three months in duration and will begin on the~~ ~~first day of each calendar quarter, with the first~~ offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by SL Green's stockholders at its 2008 annual meeting of stockholders. As of December 31, 2011, approximately

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periods. ~~PART~~Each IIoffering period will be three months in duration and will begin on the first day of each calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by SL Green's stockholders at its 2008 annual meeting of stockholders. As of December 31, 2012, approximately 66,323 shares of SL Green's common stock had been issued under the ESPP. SL Green contributed the proceeds from the sale of those shares to us in exchange for an equivalent number of our common units.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

55,600 shares of SL Green's common stock had been issued under the ESPP. SL Green contributed the proceeds from the sale of those shares to us in exchange for an equivalent number of our common units.

Market Capitalization

At December 31, ~~2011~~2012, borrowings under our mortgages and other loans payable, our ~~2011~~2012 ~~revolving~~ credit facility, senior unsecured notes, trust preferred securities and our share of joint venture debt ~~of approximately $1.8 billion~~ represented 5553.71% of SL Green's combined market capitalization of approximately $1416.23 billion (based on a common stock price of $6676.6465 per share, the closing price of SL Green's common stock on the ~~New~~NYSE ~~York Stock Exchange~~ on December 31, ~~2011~~2012). Market capitalization includes our consolidated debt, SL Green common and preferred stock and the conversion of all our units of limited partnership interest into SL Green common stock, and our share of joint venture debt.

Indebtedness

The table below summarizes our consolidated mortgages and other loans payable, our ~~2011~~2012 ~~revolving~~ credit facility, senior unsecured notes and trust preferred securities outstanding at December 31, ~~2011~~2012 and ~~2010~~2011, respectively (~~dollars~~amounts in thousands).

	December 31,
Debt Summary:	~~2011~~2012			~~2010~~2011
Balance
Fixed rate	$	4,~~802~~884,~~009~~354		$	4,~~136~~802,~~362~~009
Variable rate—hedged		3038,~~000~~371			—30,000
Total fixed rate		4,~~832~~922,~~009~~725			4,~~136~~832,~~362~~009
Variable rate		~~921~~1,~~349~~150,762			~~674~~921,~~318~~349
Variable rate—supporting variable rate assets		~~341~~446,~~138~~933			~~440~~341,~~333~~138
Total variable rate		1,~~262~~597,~~487~~695			1,~~114~~262,~~651~~487
Total	$	6,~~094~~520,~~496~~420		$	56,~~251~~094,~~013~~496
Percent of Total Debt:
Total fixed rate		7975.35	%		7879.83	%
Variable rate		2024.75	%		2120.27	%
Total		100.0	%		100.0	%
Effective Interest Rate for the Year:
Fixed rate		5.9978	%		5.9599	%
Variable rate		2.1689	%		12.7916	%
Effective interest rate		45.8708	%		4.7687	%

The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.30% at both December 31, 2011 and 2010, respectively). Our consolidated debt at December 31, 2011 had a weighted average term to maturity of approximately 5.8 years. 58

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The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (0.21% and 0.30% at December 31, 2012 and 2011, respectively). ~~PART~~Our II consolidated debt at December 31, 2012 had a weighted average term to maturity of approximately 5.85 years.

Certain of ~~ITEM~~our ~~7. Management's~~debt ~~Discussion~~ and ~~Analysis~~preferred ofequity ~~Financial~~investments, ~~Condition~~with ~~and~~a ~~Results~~face amount of ~~Operations~~ approximately $446.9 million, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt at December 31, 2012.

Certain of our debt and preferred equity investments, with a face amount net of discount, of approximately $341.1 million, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt at December 31, 2011.

Mortgage Financing

As of December 31, ~~2011~~2012, our total mortgage debt (excluding our share of joint venture debt of approximately $12.81 billion) consisted of approximately $3.45 billion of fixed rate debt, including hedged variable rate debt, with an effective weighted average interest rate of approximately 5.7764% and approximately $~~942~~1.50 ~~million~~billion of variable rate debt with an effective weighted average interest rate of approximately 3.0229%.

Corporate Indebtedness

2012 Credit Facility

In November 2012, we entered into a $1.6 billion credit facility, or the 2012 credit facility, which refinanced, extended and upsized the previous 2011 revolving credit facility. The 2012 credit facility consists of a $1.2 billion revolving credit facility, or the revolving credit facility, and a $400.0 million term loan, or the term loan facility. The revolving credit facility matures in March 2017 and includes two six-month extension options, subject to certain conditions and the payment of an extension fee of 10 basis points for each such extension. We also have an option, subject to customary conditions, without the consent of existing lenders, to increase the capacity under the revolving credit facility to $1.5 billion at any time prior to the maturity date for the revolving credit facility, by obtaining additional commitments from our current lenders and other financial institutions. The term loan facility matures on March 30, 2018.

The 2012 credit facility bears interest at a spread over LIBOR ranging from (i) 100 basis points to 175 basis points for loans under the revolving credit facility and (ii) 115 basis points to 200 basis points for loans under the term loan facility, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. At December 31, 2012, the applicable spread was 145 basis points for revolving credit facility and 165 basis points for the term loan facility. We are required to pay quarterly in arrears a 15 to 35 basis point fee on the unused balance of the commitments under the revolving credit facility. As of December 31, 2012, the facility fee was 30 basis points. At December 31, 2012, we had approximately $79.5 million of outstanding letters of credit and $70.0 million borrowings under the revolving credit facility and $400.0 million outstanding under the term loan facility, with undrawn capacity of $1.1 billion under the 2012 credit facility.

We, the Company and ROP are all borrowers jointly and severally obligated under the 2012 credit facility. No other subsidiary of ours is an obligor under the 2012 credit facility.

The 2012 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).

2011 Revolving Credit Facility

InThe ~~November~~2012 ~~2011,~~credit wefacility ~~entered~~replaced ~~into~~our a $1.5 billion revolving credit facility, or the 2011 revolving credit facility, which was terminated concurrently with the entering into the 2012 credit facility. The 2011 revolving credit facility ~~bears~~bore interest at a spread over LIBOR ranging from 100 basis points to 185 basis points, based on the credit rating assigned to the senior unsecured long -term indebtedness of ~~ROP.~~ ~~At December 31~~ROP, ~~2011, the applicable spread was 150 basis points. The 2011 revolving credit facility matures in November 2015~~ and has a one-year as-of-right extension option, subject to certain conditions and the payment of an extension fee of 20 basis points. We also have an option, subject to customary conditions, without the consent of existing lenders, to increase the capacity under the 2011 revolving credit facility to $1.75 billion at any time prior to the maturity date. We are required to pay quarterly in arrears a 17.5 to 45 basis point facility fee on the total commitments under the 2011 revolving credit facility, which fee is based on the credit rating assigned to the senior unsecured long term indebtedness of ROP. As of December 31, 2011, the facility fee was 35 basis points. At December 31, 2011, we had approximately $350.0 million of borrowings and outstanding letters of credit totaling approximately $99.3 million outstanding under the 2011 revolving credit facility, with undrawn capacity of $1.1 billion. See Restrictive Covenants below.

The Company, ROP, and the Operating Partnership are all borrowers jointly and severally obligated under the 2011 revolving credit facility. No other subsidiary of ours is an obligor under the 2011 revolving credit facility. 59

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commitments under the 2011 revolving credit facility. The 2011 revolving credit facility included certain restrictions and covenants and, as of the time of the termination of the 2011 revolving credit facility and as of November 2012, we were in compliance with all such restrictions and covenants.

2007 Revolving Credit Facility

The 2011 revolving credit facility replaced our $1.5 billion revolving credit facility, or the 2007 revolving credit facility, which was terminated concurrently with the entering into the 2011 revolving credit facility. The 2007 revolving credit facility bore interest at a spread over the 30-day LIBOR ranging from 70 basis points to 110 basis points, based on our leverage ratio, and required a 12.5 to 20 basis point fee, also based on our leverage ratio, on the unused balance payable annually in arrears. The 2007 revolving credit facility included certain restrictions and covenants and, as of the time of the termination of the 2007 revolving credit facility and as of October 31, 2011, we were in compliance with all such restrictions and covenants.

Master Repurchase Agreement

In September 2012, we entered into a Master Repurchase Agreement, or MRA, with a financial institution, with a maximum facility capacity of $175.0 million, under which we agreed to sell certain debt investments in exchange for cash with a simultaneous agreement to repurchase the same debt investments at a certain date or on demand. The MRA's interest rate is based on 1-month LIBOR plus 300 basis points. The MRA matures in September 2013, and has a 1-year extension option. At December 31, 2012, we had approximately $116.7 million outstanding under this facility, which is included in mortgage notes payable and loans.

Senior Unsecured Notes

The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2012 and 2011, respectively, by scheduled maturity date (amounts in thousands):

Issuance	December 31, 2012 Unpaid Principal Balance		December 31, 2012 Accreted Balance		December 31, 2011 Accreted Balance							Maturity

March 26, 2007(2)	$	16,893	$	16,893	$	119,423	3.00	%	3.00	%	20	March 30, 2027
June 27, 2005(3)(4)		7		7		657	4.00	%	4.00	%	20	June 15, 2025
November 15, 2012(5)		200,000		200,000		—	4.50	%	4.50	%	10	December 1, 2022
March 16, 2010(5)		250,000		250,000		250,000	7.75	%	7.75	%	10	March 15, 2020
August 5, 2011(5)		250,000		249,620		249,565	5.00	%	5.03	%	7	August 15, 2018
October 12, 2010(6)		345,000		287,373		277,629	3.00	%	7.13	%	7	October 15, 2017
March 31, 2006(3)(7)		255,308		255,165		274,804	6.00	%	6.02	%	10	March 31, 2016
August 13, 2004(3)(7)		75,898		75,898		98,578	5.88	%	5.88	%	10	August 15, 2014

	$	1,393,106	$	1,334,956	$	1,270,656

(1): Interest on the senior unsecured notes is payable semi-annually with principal and unpaid interest due on the scheduled maturity dates.
(2): In March 2007, we issued $750.0 million of these exchangeable notes. Interest on these notes is payable semi-annually on March 30 and September 30. The notes have an initial exchange rate representing an exchange price that was set at a 25.0% premium to the last reported sale price of SL Green's common stock on March 20, 2007, or $173.30. The initial exchange rate is subject to adjustment under certain circumstances. The notes are our senior unsecured obligations and are exchangeable upon the occurrence of specified events and during the period beginning on the

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~~PART~~ twenty-second scheduled IItrading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are currently redeemable at our option. We may be required to repurchase the notes on March 30, 2017 and 2022, and upon the occurrence of certain designated events. On March 30, 2012, we repurchased $102.2 million of aggregate principal amount of the exchangeable notes pursuant to a mandatory offer to repurchase the notes. On the issuance date, $66.6 million was recorded in capital and was fully amortized as of March 31, 2012. (3)Issued by ROP. (4)Exchangeable senior debentures which are currently callable at par. In addition, the debentures can be put to ROP, at the option of the holder at par plus accrued and unpaid interest, on June 15, 2015 and 2020 and upon the occurrence of certain change of control transactions. As a result of the acquisition of all outstanding shares of common stock of Reckson, or the Reckson Merger, the adjusted exchange rate for the debentures is 7.7461 shares of SL Green's common stock per $1,000 of principal amount of debentures and the adjusted reference dividend for the debentures is $1.3491. During the year ended December 31, 2012, we repurchased $650,000 of these bonds at par. (5)Issued by us, the Company and ROP, as co-obligors. (6)In October 2010, we issued $345.0 million of these exchangeable notes. Interest on these notes is payable semi-annually on April 15 and October 15. The notes had an initial exchange rate representing an exchange price that was set at a 30.0% premium to the last reported sale price of SL Green's common stock on October 6, 2010, or $85.81. The initial exchange rate is subject to adjustment under certain circumstances. The current exchange rate is 11.6800 shares of SL Green common stock per $1,000 principal amount of these notes. The notes are our senior unsecured obligations and are exchangeable upon the occurrence of specified events and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are guaranteed by ROP. On the issuance date, $78.3 million was recorded in capital. As of December 31, 2012, approximately $57.6 million remained unamortized. (7)On December 27, 2012, SL Green repurchased $42.4 million aggregate principal amount of notes, consisting of $22.7 million of the 5.875% Notes and $19.7 million of the 6.0% Notes, for a total consideration of $46.4 million and realized a net loss on early extinguishment of debt of approximately $3.8 million.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Senior Unsecured Notes

The following table sets forth our senior unsecured notes and other related disclosures by scheduled maturity date as of December 31, 2011 (in thousands):

Issuance	December 31, 2011 Unpaid Principal Balance		December 31, 2011 Accreted Balance		December 31, 2010 Accreted Balance
January 22, 2004(1)(5)(7)	$	—	$	—	$	84,823	5.15	%	5.900	%	7	January 15, 2011
August 13, 2004(1)(5)		98,578		98,578		98,578	5.875	%	6.100	%	10	August 15, 2014
March 31, 2006(1)		275,000		274,804		274,764	6.00	%	6.200	%	10	March 31, 2016
March 16, 2010(8)		250,000		250,000		250,000	7.75	%	7.750	%	10	March 15, 2020
June 27, 2005(1)(2)(5)		657		657		657	4.00	%	4.000	%	20	June 15, 2025
March 26, 2007(3)(5)		120,157		119,423		123,171	3.00	%	5.460	%	20	March 30, 2027
October 12, 2010(6)		345,000		277,629		268,552	3.00	%	7.125	%	7	October 15, 2017
August 5, 2011(8)		250,000		249,565		—	5.00	%	5.000	%	7	August 15, 2018
	$	1,339,392	$	1,270,656	$	1,100,545

(1)Issued by ROP. (2)Exchangeable senior debentures which are currently callable at 100% of par. In addition, the debentures can be put to us, at the option of the holder at par plus accrued and unpaid interest, on June 15, 2015 and 2020 and upon the occurrence of certain change of control transactions. As a result of the acquisition of all outstanding shares of common stock of Reckson Associates Realty Corp., or the Reckson Merger, the adjusted exchange rate for the debentures is 7.7461 shares of SL Green's common stock per $1,000 of principal amount of debentures and the adjusted reference dividend for the debentures is $1.3491. During the year ended December 31, 2010, SL Green repurchased approximately $115.4 million of these debentures, inclusive of debentures purchased in the tender offer discussed in Note (5) below, and realized a net loss on early extinguishment of debt of approximately $0.3 million. On the date of the Reckson Merger, $13.1 million was recorded in equity and was fully amortized as of June 30, 2010. (3)In March 2007, we issued $750.0 million of these exchangeable notes. Interest on these notes is payable semi-annually on March 30 and September 30. The notes have an initial exchange rate representing an exchange price that was set at a 25.0% premium to the last reported sale price of SL Green's common stock on March 20, 2007, or $173.30. The initial exchange rate is subject to adjustment under certain circumstances. The notes are our senior unsecured obligations and are exchangeable upon the occurrence of specified events, and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a combination of cash and shares of SL Green's common stock, if any, at our option. The notes are redeemable, at our option, on and after April 15, 2012. We may be required to repurchase the notes on March 30, 2012, 2017 and 2022, and upon the occurrence of certain designated events. The net proceeds from the offering were approximately $736.0 million, after deducting estimated fees and expenses. The proceeds of the offering were used to repay certain of our existing indebtedness, make investments in additional properties, and make open market purchases of SL Green's common stock and for general corporate purposes. During the year ended December 31, 2010, SL Green repurchased approximately $41.7 million of these bonds, inclusive of notes purchased in the tender offer discussed in Note (5) below, and realized a net loss on early extinguishment of debt of approximately $0.5 million. On the issuance date, $66.6 million was recorded in equity. As of December 31, 2011, approximately $0.7 million remained unamortized. (4)Interest on the senior unsecured notes is payable semi-annually with principal and unpaid interest due on the scheduled maturity dates. (5)In April 2010, SL Green completed a cash tender offer and purchased $13.0 million of the outstanding 3.000% Exchangeable Senior Notes due 2027 issued by the operating partnership, and $13.2 million of the outstanding 4.000% Exchangeable Senior Debentures due 2025, $38.8 million of the 5.150% Notes due 2011 and $50.0 million of the 5.875% Notes due 2014 issued by Reckson. (6)In October 2010, we issued $345.0 million of these exchangeable notes. Interest on these notes is payable semi-annually on April 15 and October 15. The notes have an initial exchange rate representing an exchange price that was set at a 30.0% premium to the last reported sale price of SL Green's common stock on October 6, 2010, or $85.81. The initial exchange rate is subject to adjustment under certain circumstances. The notes are our senior unsecured obligations and are exchangeable upon the occurrence of specified events, and during the period beginning on the twenty-second scheduled trading day prior to the maturity date and ending on the second business day prior to the maturity date, into cash or a

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

combination of cash and shares of SL Green's common stock, if any, at our option. The notes are guaranteed by ROP. The net proceeds from the offering were approximately $336.5 million, after deducting fees and expenses. The proceeds of the offering were used to repay certain of our existing indebtedness, make investments in additional properties, and for general corporate purposes. On the issuance date, $78.3 million was recorded in equity. As of December 31, 2011, approximately $67.4 million remained unamortized. (7)In January 2011, the remaining outstanding $84.8 million of ROP's 5.15% unsecured notes were repaid at par on their maturity date. (8)Issued by us, the SL Green and ROP, as co-obligors.

Junior Subordinate Deferrable Interest Debentures

In June 2005, we and SL Green issued $100.0 million of Trust Preferred Securities, which are reflected on the balance sheet as Junior Subordinate Deferrable Interest Debentures. The proceeds were used to repay our revolving credit facility. The $100.0 million of junior subordinate deferrable interest debentures have a 30-year term ending July 2035. They bear interest at a fixed rate of 5.61% for the first 10 years ending July 2015. Thereafter, the rate will float at three month LIBOR plus 1.25%. The securities are redeemable at par.

Restrictive Covenants

The terms of the ~~2011~~2012 ~~revolving~~ credit facility and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends (as discussed below), make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge ~~agreements~~ agreements and ~~the~~dispose ~~disposition~~ of assets, and which require compliance with financial ratios including our minimum tangible net worth, a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that SL Green will not during any time when the applicable obligors thereunder are in default, make distributions with respect to common stock or other equity interests, except to enable SL Green to continue to qualify as a REIT for Federal Income Tax purposes. As of December 31, 2011 and 2010, we were in compliance with all such covenants.

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financial ratios relating to the minimum amount of tangible net worth, a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that SL Green will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable SL Green to continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2012 and 2011, we were in compliance with all such covenants.

Market Rate Risk

We are exposed to changes in interest rates primarily from our floating rate borrowing arrangements. We often use interest rate ~~derivative~~ derivative instruments to manage exposure to interest rate changes. A hypothetical 100 basis point increase in interest rates along the entire interest rate curve for ~~2011~~2012 and ~~2010,~~2011 would increase our ~~annual~~ annual interest cost by approximately $1215.34 million and $1112.03 million and would increase our share of joint venture annual interest cost by approximately $4.8.5 million and $64.78 million, respectively.

We recognize ~~all~~most derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is ~~recognized~~ immediately inrecognized in earnings.

Approximately $4.89 billion of our long-term debt ~~bore~~bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in the market interest rates. The interest rate on our variable rate debt and variable rate joint venture debt as of December 31, 2012 was based on a spread of LIBOR plus 90 basis points to LIBOR plus 950 basis points.

Contractual Obligations

The combined aggregate principal maturities of mortgages and other loans payable, our 2012 credit facility, senior unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension options, estimated interest expense (based on weighted average interest rates for the quarter), and our obligations under our capital lease and ground leases, as of December 31, 2012 are as follows (in thousands):

	2013		2014		2015		2016		2017		Thereafter		Total

Property mortgages and other loans	$	348,505	$	198,788	$	285,347	$	572,053	$	1,153,525	$	2,057,246	$	4,615,464
Revolving credit facility		—		—		—		—		—		70,000		70,000
Term loan and Trust preferred securities		—		—		—		—		—		500,000		500,000
Senior unsecured notes		—		75,898		7		255,165		304,266		699,620		1,334,956
Capital lease		1,555		1,705		1,743		1,857		2,007		99,828		108,695
Ground leases		37,431		37,531		37,757		38,315		38,561		1,480,791		1,670,386
Estimated interest expense		321,669		306,015		289,910		261,169		197,046		444,216		1,820,025
Joint venture debt		176,511		309,090		36,457		528,278		933,634		151,393		2,135,363

Total	$	885,671	$	929,027	$	651,221	$	1,656,837	$	2,629,039	$	5,503,094	$	12,254,889

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

variable rate debt and joint venture debt as of December 31, 2011 ranged from LIBOR plus 150 basis points to LIBOR plus 350 basis points.

Contractual Obligations

Combined aggregate principal maturities of mortgages and other loans payable, our 2011 revolving credit facility, senior unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension options, estimated interest expense (based on weighted average interest rates for the quarter), and our obligations under our capital lease and ground leases, as of December 31, 2011 are as follows (in thousands):

	2012		2013		2014		2015		2016		Thereafter		Total
Property Mortgages	$	52,443	$	568,649	$	647,776	$	270,382	$	556,400	$	2,278,190	$	4,373,840
Revolving Credit Facility		—		—		—		—		350,000		—		350,000
Trust Preferred Securities		—		—		—		—		—		100,000		100,000
Senior Unsecured Notes		119,423		—		98,578		657		274,804		777,194		1,270,656
Capital lease		1,555		1,555		1,555		1,592		1,707		42,351		50,315
Ground leases		33,429		33,429		33,429		33,429		33,533		615,450		782,699
Estimated interest expense		312,672		309,280		269,286		244,709		212,328		470,359		1,818,634
Joint venture debt		176,457		93,683		123,983		102,476		527,814		800,102		1,824,515
Total	$	695,979	$	1,006,596	$	1,174,607	$	653,245	$	1,956,586	$	5,083,646	$	10,570,659

Off-Balance Sheet Arrangements

We have a number of off-balance sheet investments, including joint ventures and debt and preferred equity investments. These investments all have varying ownership structures. Substantially all of our joint venture arrangements are accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated financial statements. Additional information about the debt of our unconsolidated joint ventures is included in "Contractual Obligations" above.

Capital Expenditures

We estimate that for the year ending December 31, ~~2012~~2013, we expect to incur, approximately $~~148~~167.61 million of capital expenditures which are net of loan reserves, (including tenant improvements and leasing commissions) on existing wholly-owned properties, and our share of capital expenditures at our joint venture properties, net of loan reserves, will be approximately $44.19 million. We expect to fund these capital expenditures with operating cash flow, additional property level mortgage financings and cash on hand. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs. We expect that these financing requirements will be met in a similar fashion. We believe that we will have sufficient resources to satisfy our capital needs during the next 12-month period. Thereafter, we expect our capital needs will be met through a combination of cash on hand, net cash provided by operations, borrowings, potential asset sales or additional equity or debt issuances.

Distributions

SL Green expects to pay dividends to its stockholders based on the distributions we make to it primarily from property revenues net of operating expenses or, if necessary, from working capital or borrowings. If SL Green declares a dividend, such dividend is generally paid in the subsequent quarter.

In order to enable SL Green to maintain its qualification as a REIT, it must pay annual dividends to its stockholders of at least 90% of its taxable income, determined before taking into consideration the dividends paid deduction and net capital gains. SL Green has adopted a policy of paying regular quarterly dividends on its common stock, and we have adopted a policy of paying regular quarterly distributions on our common units corresponding to dividends paid by SL Green. Cash distributions have been paid on the common stock of SL Green and our common units since the initial public offering of SL Green. Distributions are declared at the discretion of the board of directors of SL Green and depend on actual and anticipated cash from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code and other factors SL Green's board of directors may consider relevant.

Based on SL Green's current annual dividend rate of $1.32 per share, it would pay approximately $120.5 million in dividends to its common stockholders on an annual basis. Before SL Green pays any dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under our unsecured revolving credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

hand, net cash provided by operations, borrowings, potential asset sales or additional equity or debt issuances.

Distributions

In order to enable SL Green to maintain its qualification as a REIT, it must make annual distributions to its stockholders of at least 90% of its taxable income determined before taking into consideration the dividends paid deduction and net capital gains. SL Green has adopted a policy of paying regular quarterly dividends on its common stock, and we have adopted a policy of paying regular quarterly distributions on our common units corresponding to dividends paid by SL Green. Cash distributions have been paid on the common stock of SL Green and our common units since the initial public offering of SL Green. Distributions are declared at the discretion of the board of directors of SL Green and depend on actual and anticipated cash from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code and other factors SL Green's board of directors may consider relevant.

Based on SL Green's current annual dividend rate of $1.00 per share, it would pay approximately $86.4 million in dividends on an annual basis. Before SL Green pays any dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under our unsecured revolving credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.

Related Party Transactions

Cleaning/ Security/ Messenger and Restoration Services

Through Alliance Building Services, or Alliance, First Quality Maintenance, L.P., or First Quality, provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of Stephen L. Green, the chairman of SL Green's board of directors. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease agreements. Alliance paid the Service Corporation approximately $24.70 million, $2.27 million and $12.82 million for the years ended December 31, ~~2011~~2012, ~~2010~~2011 and ~~2009~~2010, respectively. We paid Alliance approximately $1617.19 million, $1416.21 million and $14.92 million for three years ended December 31, ~~2011~~2012, respectively, for these services (excluding services provided directly to tenants).

Marketing Services

A-List Marketing, LLC, or A-List, provides marketing services to us. Ms. Deena Wolff, a sister of Mr. Marc Holliday, is the owner of A-List. The aggregate amount of fees we paid to A-List for these marketing services was approximately $155,500, $140,300 and $86,300 for the three years ended December 31, 2012, respectively.

Leases

Nancy Peck and Company leases 1,003 square feet of space at 420 Lexington Avenue under a lease that ends in August 2015. Nancy Peck and Company is owned by Nancy Peck, the wife of Stephen L. Green. The rent due under the lease was $35,516 per annum for year one increasing to $40,000 in year seven.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Stephen L. Green. The rent due under the lease is $35,516 per annum for year one increasing to $40,000 in year seven.

Management Fees

S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen L. Green owns an interest. The aggregate amount of fees paid to S.L. Green Management Corp. from such entity was approximately $384,900, $420,300 inand ~~2011,~~ $390,700 infor ~~2010~~the ~~and~~three ~~$351,700~~years inended ~~2009~~December 31, 2012, respectively.

Brokerage Services

Cushman & Wakefield Sonnenblick-Goldman Company, LLC, or Sonnenblick, a nationally recognized real estate investment banking firm, provided mortgage brokerage services to us. Mr. Morton Holliday, the father of Mr. Marc Holliday, was a Managing Director of Sonnenblick at the time of the financings. In 2009, we paid approximately $428,000 to Sonnenblick in connection with the refinancing of 420 Lexington Avenue.

Gramercy Capital Corp.

Our related party transactions with Gramercy are discussed in Note 136, "~~Related~~Investment ~~Party~~in ~~Transactions~~Unconsolidated Ventures—Gramercy Capital Corp.," in the accompanying financial statements.

Insurance

We maintain "all-risk" property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism) within two property insurance portfolios and liability insurance. ~~The~~As of December 31, 2012, the first property portfolio maintains a blanket limit of $~~750~~775.0 million per occurrence, including terrorism, for the majority of the New York City properties in our portfolio. ~~This policy expires on December 31, 2012.~~ The second portfolio maintains a limit of $~~600~~750.0 million per occurrence, including terrorism, for some New York City properties and the majority of the Suburban properties. ~~The~~Both ~~second~~policies ~~property~~expire ~~policy expires~~ on December 31, ~~2012~~2013. ~~Additional~~Each ~~coverage~~policy ~~may~~includes ~~be purchased on a stand-alone basis for certain assets. We maintain liability policies which cover all our properties and provide limits of~~ $~~201~~100.0 million ~~per~~of ~~occurrence~~flood ~~and~~coverage inwith ~~the~~a lower ~~aggregate~~sublimit ~~per~~for ~~location. The liability policies expire on October 31, 2012.~~

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locations in high hazard flood zones. We maintain liability policies which cover all our properties and provide limits of $201.0 million per occurrence and in the aggregate per location. The liability policies expire on October 31, 2013. Additional coverage may be purchased on a stand-alone basis for certain assets.

In October 2006, SL Green formed a wholly-owned taxable REIT subsidiary, Belmont Insurance Company, or Belmont, to act as a captive insurance company and be one of the elements of its overall insurance program. Belmont is a subsidiary of ours. Belmont was formed in an effort to, among other reasons, stabilize to some extent the fluctuations of insurance market conditions. Belmont is licensed in New York to write Terrorism, NBCR (nuclear, biological, chemical, and radiological), General Liability, Environmental Liability and D&O coverage.

•: Terrorism: Belmont acts as a direct property insurer with respect to a portion of our terrorism coverage for the New York City properties. Belmont has a terrorism coverage limit of $650 million in a layer in excess of $100.0 million. In addition Belmont purchased reinsurance to reinsure the retained insurable risk not otherwise covered under Terrorism Risk Insurance Program Reauthorization and Extension Act of 2007, or TRIPRA, as detailed below.
•: NBCR: Belmont has acted as a direct insurer of NBCR and since December 31, 2011, has provided coverage up to $750 million on the entire property portfolio for certified acts of terrorism above a program trigger of $100.0 million. Belmont is responsible for a small deductible and 15% of a loss, with the remaining 85% covered by the Federal government.
•: General Liability: For the period commencing October 31, 2010, Belmont insures a retention on the general liability insurance of $150,000 per occurrence and a $2.1 million annual aggregate stop loss limit. We have secured excess insurance to protect against catastrophic liability losses above the $150,000 retention. Prior policy years carried a higher per occurrence deductible and/or higher aggregate stop loss. Belmont has retained a third party administrator to manage all claims within the retention and we anticipate that direct management of liability claims will improve loss experience and ultimately lower the cost of liability insurance in future years. In addition, we have an umbrella liability policy of $200.0 million per occurrence and in the aggregate on a per location basis.
•: Environmental Liability: Belmont insures a deductible of $975,000 per occurrence in excess of $25,000 on a $25 million per occurrence and $30 million aggregate environmental liability policy covering the entire portfolio.

As long as we own Belmont, we are responsible for its liquidity and capital resources, and the accounts of Belmont are part of our consolidated financial statements. If we experience a loss and Belmont is required to pay under its insurance policy, we would ultimately record the loss to the extent of Belmont's required payment. Therefore, insurance coverage provided by Belmont should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance.

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cost. ~~PART~~In IIsuch instances, there can be no assurance that the lenders or ground lessors under these instruments will not take the position that a total or partial exclusion from "all-risk" insurance coverage for losses due to terrorist acts is a breach of these debt and ground lease instruments allowing the lenders or ground lessors to declare an event of default and accelerate repayment of debt or recapture of ground lease positions. In addition, if lenders prevail in asserting that we are required to maintain full coverage for these risks, it could result in substantially higher insurance premiums.

We monitor ~~ITEM~~all 7properties that are subject to triple net leases to ensure that tenants are providing adequate coverage. ~~Management's~~ ~~Discussion~~Certain ~~and~~joint ~~Analysis~~ventures may be covered under policies separate from our policies, at coverage limits which we deem to be adequate. We continually monitor these policies. Although we consider our insurance coverage to be appropriate, in the event of ~~Financial~~a ~~Condition~~major catastrophe, ~~and~~such ~~Results~~as an act of ~~Operations~~terrorism, we may not have sufficient coverage to replace certain properties.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

We have a 49.9% interest in the property at 100 Park Avenue, where we participate with Prudential, which carries a blanket policy of $500.0 million of "all-risk" property insurance, including terrorism coverage. We own One Madison Avenue, which is under a triple net lease with insurance provided by the tenant, Credit Suisse Securities (USA) LLC, or CS. We monitor the coverage provided by CS to make sure that our asset is adequately protected. We have a 50.6% interest in the property at 388 and 390 Greenwich Street, where we participate with SITQ, which is leased on a triple net basis to Citigroup, N.A., which provides insurance coverage directly. We monitor all triple net leases to ensure that tenants are providing adequate coverage. Other joint ventures may be covered under policies separate from our policies, at coverage limits which we deem to be adequate. We continually monitor these policies. Although we consider our insurance coverage to be appropriate, in the event of a major catastrophe, such as an act of terrorism, we may not have sufficient coverage to replace certain properties.

Inflation

Substantially all of the office leases provide for separate real estate tax and operating expense escalations as well as operating expense recoveries based on increases in the Consumer Price Index or other measures such as porters' wage. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases may be at least partially offset by the contractual rent increases and expense escalations described above.

Accounting Standards Updates

The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies- —Accounting Standards Updates" in the accompanying consolidated financial statements.

Forward-Looking Information

This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the Manhattan, Brooklyn, ~~Queens,~~ Westchester County, Connecticut, Long Island and Northern New Jersey office markets, business strategies, expansion and growth of our operations and other similar matters, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.

Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially,, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.

Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. These risks and uncertainties include:

•: the effect of general economic, business and financial conditions, and their effect on the New York metropolitan real estate market in particular;
•: dependence upon certain geographic markets;

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•: risks of real estate acquisitions, dispositions and developments, including the cost of construction delays and cost overruns;
•: risks relating to debt and preferred equity investments;
•: availability and creditworthiness of prospective tenants and borrowers;
•: bankruptcy or insolvency of a major tenant or a significant number of smaller tenants;
•: adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy, and increasing availability of sublease space;
•: availability of capital (debt and equity);
•: unanticipated increases in financing and other costs, including a rise in interest rates;
•: our ability to comply with financial covenants in our debt instruments;
•: SL Green's ability to maintain its status as a REIT;
•: risks of investing through joint venture structures, including the fulfillment by our partners of their financial obligations;
•: the continuing threat of terrorist attacks, in particular in the New York Metropolitan area and on our tenants;
•: our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of our insurance coverage, including as a result of environmental contamination; and
•: legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business, including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other similar laws and regulations.

Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

from future results, performance or achievements expressed or implied by forward-looking statements made by us. These risks and uncertainties include:

Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Rate Risk" for additional information regarding our exposure to interest rate fluctuations.

The table below presents the principal cash flows based upon maturity dates of ~~SLGOP's~~our debt obligations and debt and preferred equity investments and the related weighted-average ~~interest~~ interest rates by expected maturity dates, including as-of-right extension options, as of December 31, ~~2011~~2012 (in thousands):

			Long-Term Debt								Debt and Preferred Equity Investments(1)
Date	Fixed Rate		Average Interest Rate			Variable Rate		Average Interest Rate			Amount		Weighted Yield
2012	$	153,062		5.92	%	$	18,804		2.71	%	$	160,098		5.77	%
2013	$	215,437		5.76	%	$	133,067		2.89	%	$	229,593		11.20	%
2013		337,796		5.94			230,853		2.72			10,650		19.93
2014		257,856		5.78			16,829		2.86			591,189		10.06
2014		308,834		5.97			437,520		2.77			440,001		9.91
2015		268,261		5.78			17,093		2.85			138,968		9.22
2015		263,422		5.99			7,617		1.81			45,000		10.53
2016		569,582		5.75			257,636		2.86			268,149		9.25
2016		613,511		5.99			567,693		1.81			217,876		8.64
2017		1,446,888		5.72			10,904		2.95			125,804		8.88
Thereafter		32,~~155~~164,~~383~~701		5.5618			—1,162,166		—2.99			~~112~~3,~~317~~500		27.8109
Total	$	4,~~832~~922,~~008~~725		5.5644	%	$	1,~~262~~597,~~487~~695		2.5890	%	$	~~985~~1,~~942~~357,203		89.2889	%
Fair Value	$	5,~~192~~334,~~000~~244				$	1,~~223~~577,~~000~~494

(1)Our debt and preferred equity investments had an estimated fair value ranging between $~~838.~~1.3 ~~million~~billion and $~~936~~1.74 ~~million~~billion at December 31, ~~2011~~2012.

The table below presents the principal cash flows based upon maturity dates of ~~SLGOP's~~our share of ~~its~~our joint venture debt obligations and the related weighted-average interest rates by expected maturity dates as of December 31, ~~2011~~2012 (in thousands):

	Long Term Debt
Date	Fixed Rate		Average Interest Rate			Variable Rate		Average Interest Rate
2012	$	13,398		4.75	%	$	163,059		2.94	%
2013	$	19,025		5.27	%	$	157,486		3.23	%
2013		3,001		4.75			90,681		2.50
2014		107,983		5.24			201,108		3.12
2014		107,983		4.72			16,000		2.16
2015		3,068		5.17			33,389		2.70
2015		97,568		4.59			4,908		2.00
2016		398,830		4.95			129,448		2.42
2016		398,303		4.16			129,511		2.08
2017		664,580		4.44			269,054		2.33
Thereafter		~~724~~64,~~304~~901		27.7847			7586,~~799~~491		2.0380
Total	$	1,~~344~~258,~~557~~387		45.6146	%	$	~~479~~876,~~958~~976		2.5692	%
Fair Value	$	1,~~251~~195,~~000~~179				$	~~463~~836,~~000~~294

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The table below lists all of our derivative instruments, which are hedging variable rate debt, excluding joint ventures, and their related fair value as of December 31, 2012 (in thousands):

	Asset Hedged	Benchmark Rate						Fair Value

Interest Rate Cap	Mortgage	LIBOR	775,000	3.650	%	4/2012	4/2013		—
Interest Rate Cap	Mortgage	LIBOR	475,000	6.000	%	3/2012	3/2013		—
Interest Rate Cap	Mortgage	LIBOR	271,912	6.000	%	11/2012	11/2013		—
Interest Rate Swap	Revolving credit facility	LIBOR	30,000	2.295	%	7/2010	6/2016		(1,881	)
Interest Rate Swap	Mortgage	LIBOR	8,500	0.740	%	2/2012	2/2015		(78	)

Total Consolidated Hedges								$	(1,959	)

In addition to these derivative instruments, some of our joint venture loan agreements require the joint venture to purchase interest rate caps on its debt. All such interest rate caps had no value at December 31, 2012. We had also hedged certain floating rate debt at a joint venture. These hedges represented an obligation of approximately $33.2 million at December 31, 2012.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The table below lists all of our derivative instruments, which are hedging variable rate debt, excluding joint ventures, and their related fair value as of December 31, 2011 (in thousands):

	Asset Hedged	Benchmark Rate						Fair Value
Interest Rate Cap	Mortgage	LIBOR	110,180	6.000	%	2/2011	2/2012		—
Interest Rate Cap	Mortgage	LIBOR	139,672	5.000	%	1/2011	1/2012		—
Interest Rate Swap	Revolving credit facility	LIBOR	30,000	2.295	%	7/2010	6/2016		(1,716	)
Interest Rate Cap	Mortgage	LIBOR	280,000	6.000	%	11/2011	11/2012		—
Currency Hedge	Mortgage receivable	GBP-USD	20,748	1.55185		9/2010	12/2012		(151	)
Total Consolidated Hedges								$	(1,867	)

In addition to these derivative instruments, some of our joint venture loan agreements require the joint venture to purchase interest rate caps on its debt. All such interest rate caps had no value at December 31, 2011. We had also hedged certain floating rate debt at a joint venture. These hedges represented an obligation of approximately $35.4 million at December 31, 2011.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements and Schedules

SL GREEN OPERATING PARTNERSHIP, L.P.
Report of Independent Registered Public Accounting Firm	72	71
Consolidated Balance Sheets as of December 31, 2011 and 2010	73
Consolidated Balance Sheets as of December 31, 2012 and 2011		72
Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009	74
Consolidated Statements of Income for the years ended December 31, 2012, 2011 and 2010		73
Consolidated Statements of Capital for the years ended December 31, 2011, 2010 and 2009	75
Consolidated Statements of Comprehensive Income for the years ended December 31, 2012, 2011 and 2010		74
Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009	77
Consolidated Statements of Capital for the years ended December 31, 2012, 2011 and 2010		75
Notes to Consolidated Financial Statements	78
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010		76
Schedules
Notes to Consolidated Financial Statements		77
Schedule II-Valuation and Qualifying Accounts—years ended December 31, 2011, 2010 and 2009	141
Schedules
Schedule III Real Estate and Accumulated Depreciation as of December 31, 2011	142
Schedule II-Valuation and Qualifying Accounts for the years ended December 31, 2012, 2011 and 2010		139
All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.
Schedule III Real Estate and Accumulated Depreciation as of December 31, 2012		140
The consolidated financial statements of Rock-Green, Inc. and 1515 Broadway Realty Corp.
All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.
Consolidated Financial Statements and Report of Ernst & Young LLP Independent Registered Public Accounting Firm for Rock-Green, Inc.	144
1515 BROADWAY REALTY CORP.
Consolidated Statements of Income for the period January 1, 2010 to April 30, 2010 (unaudited) and the year ended December 31, 2009	145
Report of Independent Registered Public Accounting Firm		142
Consolidated Statements of Changes in Equity for the period January 1, 2010 to April 30, 2010 (unaudited) and the year ended December 31, 2009	146
Consolidated Statement of Income for the year ended December 31, 2010		143
Consolidated Statements of Cash Flows for the period January 1, 2010 to April 30, 2010 (unaudited) and the year ended December 31, 2009	147
Consolidated Statement of Equity for the year ended December 31, 2010		144
Notes to the Consolidated Financial Statements	148
Consolidated Statement of Cash Flows for the year ended December 31, 2010		145
Consolidated Financial Statements and Report of Ernst & Young LLP Independent Registered Public Accounting Firm for 1515 Broadway Realty Corp.	154
Notes to the Consolidated Financial Statements		146
Consolidated Balance Sheet as of December 31, 2010	155
Consolidated Statements of Income for the years ended December 31, 2010 and 2009	156
Consolidated Statements of Changes in Equity for the years ended December 31, 2010 and 2009	157
Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009	158
Notes to the Consolidated Financial Statements	159

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Table of Contents

PART II

Report of Independent Registered Public Accounting Firm

~~The~~To the Partners of SL Green Operating Partnership, L.P.:

We have audited the accompanying consolidated balance sheets of SL Green Operating Partnership, L.P. (the "Company") as of December 31, ~~2011~~2012 and ~~2010~~2011, and the related consolidated statements of income and comprehensive income, capital and cash flows for each of the three years in the period ended December 31, ~~2011~~2012. Our audits also included the financial statement schedules listed in the Index at Item 15(a)(2). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit al

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