SL Green, a leading New York-based office real estate investment trust (REIT), has not yet seen much impact from the downturn in the financial services sector in its third quarter earnings.

The REIT has reported funds from operations (FFO), a measure of earnings commonly used in the REIT world, of $1.45 per share for the third quarter, a 16% increase compared with FFO of $1.25 per share for the third quarter of 2007. However, occupancy in SL Green’s comparable New York portfolio was down to 95.6% for September 2008 from 96.5% for September 2007.

Marc Holliday, CEO of the REIT, said in a third-quarter earnings conference call that the REIT’s New York office buildings are “well situated to retain tenants.” He expects that the effects of the current market decline will not be seen until 2009.

While Holliday expects that the REIT will be buffered from the financial services impact due to its diverse tenant base, it doesn’t mean that they are totally immune to any impact if the credit market remains frozen.

Holliday noted that the New York market is relatively more liquid due to the interest of foreign capital and private capital, although these sources have been “temporarily sidelined.”

At the end of the third quarter, the REIT owned 30 New York City office properties totaling more than 23 million sq. ft., making it one of the largest office landlords in the New York metropolitan area.