Manhattan's office market may begin to recover in the next year as financial industry job losses abate and company executives gain confidence, SL Green Realty Corp. Chief Executive Officer Marc Holliday said.

"A lot of the correction has already occurred," Holliday said. "Everybody thinks the world is falling apart. It is tough out there, but I can see that in the next six to 12 months we'll be at an inflection point."

Manhattan office prices dropped 13% in March from a year earlier and rents are down an average of 28% from their peak, according to CB Richard Ellis Group Inc. and Moody's Investors Service. Holliday said rents may decline another 10% to 15% before stabilizing next year.

SL Green is Manhattan's biggest office landlord, with 23.2 million square feet of space. Job losses in the financial industry, which leases one out of every four square feet in Manhattan, have not been as bad as forecast, Holliday said.

SL Green gets about 41% of its revenue from financial tenants, including Citigroup Inc. Citi is the company's largest tenant, accounting for 14% of revenue.

Investors have punished SL Green for its New York focus.

The shares have lost 73% of their value in the year through June 26.

SL Green has been selling loans it made to commercial landlords, including mezzanine loans. Holliday said the company is examining opportunities to convert debt positions in properties to equity. "We may wind up taking the entire equity interest," he said.

It is also expanding its business of servicing commercial mortgages, Holliday said. SL Green managed the March 31 sale of the Hancock Tower in Boston on behalf of the building's debt holders.

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