UPDATE 1-SL Green first-quarter FFO $1.07/shr

NEW YORK, April 26 Mon Apr 26, 2010 8:31pm EDT

NEW YORK, April 26 (Reuters) - SL Green Realty Corp (SLG.N), one of the largest owners of midtown Manhattan office buildings, said on Monday its first-quarter funds from operations fell 28 percent but exceeded analysts' expectations.

The company reported first-quarter FFO of $85 million, or $1.07 per share, down from $88.1 million, or $1.48 per share, in the year-earlier quarter.

Analysts had forecast FFO of $1.05 per share, according to Thomson Reuters I/B/E/S. FFO, a performance metric, removes the profit-reducing effect of depreciation, a noncash accounting item.

During the quarter, SL Green signed 47 office leases in Manhattan and 31 office leases in the suburbs during the fourth quarter.

For properties the company has operated for more than a year, net operating income, which gauges the amount of cash the properties generate after expenses, rose 2.4 percent in the quarter.

Occupancy at SL Green's Manhattan buildings was 94 percent at the end of the quarter, SL Green said, excluding 100 Church Street which the company foreclosed on in January. Including the building, occupancy was 92 percent.

The average lease term was 9.1 years and average tenant concessions were 5.5 months of free rent with improvements for space, running the company about $28.31 per square foot.

SL Green shares closed down 19 cents at $64.33 on the New York Stock Exchange before the earnings were released, and edged lower in after-hours trade. Year-to-date, SL Green shares are up 28 percent, ahead of the 18.7 percent rise of the benchmark MSCI U.S. REIT Index .RMZ.

(Reporting by Ilaina Jonas and Joseph A. Giannone; Editing by Richard Chang)