Paramount Group, Inc. - FORM 8-K - EX-99.2

Paramount Group, Inc. - FORM 8-K - EX-99.2 - November 2, 2016

Attached files

Attached files

Paramount Group, Inc. Reports

file	filename
EX-99.1 - EX-99.1 - Paramount Group, Inc.	d283480dex991.htm
8-K - 8-K - Paramount Group, Inc.	d283480d8k.htm

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED SEPTEMBER 30, 2016


		FORWARD-LOOKING STATEMENTS

This supplemental information contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. We do not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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		TABLE OF CONTENTS


		Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Financial Highlights		6
Consolidated Balance Sheets		7
Consolidated Statements of Income		8
Select Income Statement Data		9
Funds From Operations (“FFO”)		10
Funds Available for Distribution (“FAD”)		11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)		12
Net Operating Income (“NOI”)		13
NOI - By Segment		14-15
Same Store Results - By Segment		16-19
Consolidated Joint Ventures and Funds		20-22
Unconsolidated Joint Ventures		23-25
Unconsolidated Funds Summary		26
Capital Structure		27
Debt Analysis		28
Debt Maturities		29

Selected Property Data
Portfolio Summary		30
Top Tenants and Industry Diversification		31
Leasing Activity		32-33
Lease Expirations		34-37
Cash Basis Capital Expenditures		38-42

Definitions		43-44

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		COMPANY PROFILE

Paramount Group, Inc. (“Paramount”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.


EXECUTIVE MANAGEMENT
Albert Behler		Chairman, Chief Executive Officer and President
Wilbur Paes		Executive Vice President, Chief Financial Officer and Treasurer
Jolanta Bott		Executive Vice President, Operations and Human Resources
Theodore Koltis		Executive Vice President, Leasing
Daniel Lauer		Executive Vice President, Chief Investment Officer
Ralph DiRuggiero		Senior Vice President, Property Management
Gage Johnson		Senior Vice President, General Counsel and Secretary
Vito Messina		Senior Vice President, Asset Management

BOARD OF DIRECTORS
Albert Behler		Director, Chairman of the Board
Thomas Armbrust		Director
Martin Bussmann		Director
Dan Emmett		Director, Chair of Audit Committee
Lizanne Galbreath		Director, Chair of Compensation Committee
Karin Klein		Director
Peter Linneman		Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
David O’Connor		Director
Katharina Otto-Bernstein		Director

- 4 -


		RESEARCH COVERAGE⁽¹⁾


James Feldman	Thomas Catherwood	Thomas Lesnick	Vin Chao
Bank of America Merrill Lynch	BTIG	Capital One Securities, Inc.	Deutsche Bank
(646) 855-5808	(212) 738-6140	(571) 633-8191	(212) 250-6799

Steve Sakwa	Brad Burke	Jed Reagan	Richard Anderson
Evercore ISI	Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.
(212) 446-9462	(917) 343-2082	(949) 640-8780	(212) 205-8445

Vikram Malhotra	Nick Yulico	Blaine Heck
Morgan Stanley	UBS	Wells Fargo
(212) 761-7064	(212) 713-3402	(443) 263-6529

⁽¹⁾

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by such analysts do not represent the opinions, estimates or forecasts of the Company or its management. The Company does not by its reference above, imply its endorsement of or concurrence with any information, conclusions or recommendations made by any such analysts.

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		FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except square feet and per share amounts)


	Three Months Ended									Nine Months Ended
SELECTED FINANCIAL DATA	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
Total revenues	$	171,318		$	167,726		$	172,303		$	516,539		$	491,880
Net (loss) income attributable to common stockholders	$	(139	)	$	1,116		$	3,188		$	(3,445	)	$	(13,324	)
Per share—basic and diluted	$	(0.00	)	$	0.01		$	0.01		$	(0.02	)	$	(0.06	)
Pro rata share of NOI ⁽¹⁾	$	95,315		$	91,428		$	100,175		$	295,655		$	271,849
Pro rata share of Cash NOI ⁽¹⁾	$	72,432		$	77,223		$	72,253		$	231,924		$	233,021
FFO attributable to common stockholders ⁽¹⁾	$	50,615		$	51,810		$	54,243		$	154,106		$	147,790
Per share—diluted	$	0.23		$	0.24		$	0.25		$	0.71		$	0.70
Core FFO attributable to common stockholders⁽¹⁾	$	44,092		$	42,330		$	49,389		$	142,473		$	127,608
Per share—diluted	$	0.20		$	0.20		$	0.23		$	0.66		$	0.60
FAD attributable to common stockholders ⁽¹⁾	$	18,684		$	22,657		$	13,663		$	59,438		$	61,331

COMMON SHARE DATA

	Three Months Ended
Share Price:	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
High	$	18.28		$	17.40		$	17.97		$	18.56		$	18.35
Low	$	15.36		$	15.26		$	14.23		$	16.50		$	15.65
Closing (end of period)	$	16.39		$	15.94		$	15.95		$	18.10		$	16.80
Dividends per common share	$	0.095		$	0.095		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.380		$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.3	%		2.4	%		2.4	%		2.1	%		2.3	%

PORTFOLIO STATISTICS

	Number of			Square			% Leased⁽¹⁾			% Occupied⁽¹⁾
Region:	Properties			Feet			as of September 30, 2016			as of September 30, 2016
New York		6			7,152,207			90.4	%		87.9	%
Washington, D.C.		5			1,602,655			94.3	%		92.4	%
San Francisco		1			1,611,125			98.8	%		96.8	%

		12			10,365,987			92.3	%		90.0	%

⁽¹⁾	See page 43 for our definition of this measure.

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	September 30, 2016			December 31, 2015
ASSETS:
Rental Property, at cost
Land	$	2,042,071		$	2,042,071
Buildings and improvements		5,691,354			5,610,046

		7,733,425			7,652,117
Accumulated depreciation and amortization		(363,104	)		(243,089	)

Rental property, net		7,370,321			7,409,028
Cash and cash equivalents		83,281			143,884
Restricted cash		30,304			41,823
Real estate fund investments		—			416,438
Investments in unconsolidated real estate funds		25,521			—
Investments in unconsolidated joint ventures		6,550			7,102
Preferred equity investments		54,807			53,941
Marketable securities		22,011			21,521
Deferred rent receivable		150,539			77,792
Accounts and other receivables, net		12,185			10,844
Deferred charges, net		81,672			74,991
Intangible assets, net		406,186			511,207
Other assets		96,671			6,658

Total Assets	$	8,340,048		$	8,775,229


LIABILITIES:
Notes and mortgages payable, net	$	3,016,597		$	2,922,610
Revolving credit facility		50,000			20,000
Due to affiliates ⁽¹⁾		27,299			27,299
Loans payable to noncontrolling interests		—			45,662
Accounts payable and accrued expenses		85,947			102,730
Dividends and distributions payable		25,151			25,067
Deferred income taxes		246			2,533
Interest rate swap liabilities		82,046			93,936
Intangible liabilities, net		144,197			179,741
Other liabilities		46,275			45,101

Total Liabilities		3,477,758			3,464,679

EQUITY:
Paramount Group, Inc. equity		3,796,326			3,761,017
Noncontrolling interests in:
Consolidated real estate funds		62,790			414,637
Consolidated joint ventures		244,234			236,849
Operating Partnership		758,940			898,047

Total Equity		4,862,290			5,310,550

Total Liabilities and Equity	$	8,340,048		$	8,775,229

⁽¹⁾	Represents notes payable to affiliates, which are due in October 2017 and bear interest at a fixed rate of 0.50%.

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		CONSOLIDATED STATEMENTS OF INCOME

(unaudited and in thousands, except share and per share amounts)


	Three Months Ended									Nine Months Ended
	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
REVENUES:
Property rentals	$	122,606		$	127,176		$	123,408		$	371,016		$	382,532
Straight-line rent adjustments		23,301			17,817			24,673			67,843			49,859
Amortization of above and below-market leases, net		3,112			1,477			7,100			6,593			3,239

Rental income		149,019			146,470			155,181			445,452			435,630
Tenant reimbursement income		11,978			14,405			10,334			33,101			39,956
Fee income (see details on page 9)		3,976			2,085			4,175			11,568			5,400
Other income (see details on page 9)		6,345			4,766			2,613			26,418			10,894

Total revenues		171,318			167,726			172,303			516,539			491,880
EXPENSES:
Operating		64,025			63,354			59,994			186,964			183,019
Depreciation and amortization		66,376			70,654			67,287			208,475			223,658
General and administrative (see details on page 9)		13,235			6,666			12,139			39,335			28,412
Acquisition and transaction related costs		282			485			508			1,725			9,832

Total expenses		143,918			141,159			139,928			436,499			444,921
Operating income		27,400			26,567			32,375			80,040			46,959
Income from real estate fund investments		—			10,933			—			—			30,226
Loss from unconsolidated real estate funds		(1,254	)		—			(960	)		(2,540	)		—
Income from unconsolidated joint ventures		1,792			1,458			2,003			5,291			4,444
Interest and other income (loss), net (see details on page 9)		2,299			(1,763	)		1,030			5,029			(397	)
Interest and debt expense (see details on page 9)		(38,278	)		(42,821	)		(38,009	)		(113,406	)		(126,945	)
Unrealized gain on interest rate swaps		12,728			15,772			10,073			29,661			49,497

Net income before income taxes		4,687			10,146			6,512			4,075			3,784
Income tax (expense) benefit		(218	)		(789	)		1,398			817			(2,706	)

Net income		4,469			9,357			7,910			4,892			1,078
Less net (income) loss attributable to noncontrolling interests in:
Consolidated real estate funds		67			(7,936	)		78			819			(16,677	)
Consolidated joint ventures		(4,703	)		(33	)		(4,107	)		(10,062	)		(964	)
Operating Partnership		28			(272	)		(693	)		906			3,239

Net (loss) income attributable to common stockholders	$	(139	)	$	1,116		$	3,188		$	(3,445	)	$	(13,324	)


Weighted average common shares outstanding
Basic		219,394,245			212,106,718			217,121,592			216,317,746			212,106,718

Diluted		219,394,245			212,108,079			217,137,557			216,317,746			212,106,718

(Loss) income per common share
Basic	$	(0.00	)	$	0.01		$	0.01		$	(0.02	)	$	(0.06	)

Diluted	$	(0.00	)	$	0.01		$	0.01		$	(0.02	)	$	(0.06	)

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
Fee Income:	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Property management	$	1,404	$	1,559	$	1,539	$	4,464	$	4,274
Asset management ⁽¹⁾		2,003		—		1,783		5,500		—
Acquisition and leasing		244		400		629		873		669
Other		325		126		224		731		457

Total fee income	$	3,976	$	2,085	$	4,175	$	11,568	$	5,400

⁽¹⁾

As a result of deconsolidating our real estate funds that were accounted for at fair value on January 1, 2016, asset management fees are now included in fee income, as opposed to a reduction of income attributable to noncontrolling interests in the prior periods. (See pages 21 and 22 for asset management fees recognized in prior periods.)



	Three Months Ended								Nine Months Ended
Other Income:	September 30, 2016		September 30, 2015			June 30, 2016			September 30, 2016		September 30, 2015
Lease termination income	$	3,460	$	50		$	93		$	14,508	$	688
Other (primarily tenant requested work)		2,885		4,716			2,520			11,910		10,206

Total other income	$	6,345	$	4,766		$	2,613		$	26,418	$	10,894


	Three Months Ended								Nine Months Ended
General and Administrative:	September 30, 2016		September 30, 2015			June 30, 2016			September 30, 2016		September 30, 2015
Non-cash general and administrative - stock based compensation expense	$	2,583	$	1,613		$	2,556		$	6,911	$	4,157
All other general and administrative		9,916		6,993			10,326			29,353		21,785
Mark-to-market of deferred compensation plan liabilities (offset by an increase (decrease) in the mark-to-market of plan assets, which is included in interest and other income)		736		(1,940	)		(743	)		197		(845	)
Severance costs		—		—			—			2,874		3,315

Total general and administrative	$	13,235	$	6,666		$	12,139		$	39,335	$	28,412


	Three Months Ended								Nine Months Ended
Interest and Other Income (Loss):	September 30, 2016		September 30, 2015			June 30, 2016			September 30, 2016		September 30, 2015
Preferred equity investment income ⁽¹⁾	$	1,460	$	—		$	1,423		$	4,299	$	—
Interest income		103		177			350			533		448
Mark-to-market of deferred compensation plan assets (offset by an increase (decrease) in the mark-to-market of plan liabilities, which is included in “general and administrative” expenses)		736		(1,940	)		(743	)		197		(845	)

Total interest and other income (loss)	$	2,299	$	(1,763	)	$	1,030		$	5,029	$	(397	)

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., which was acquired in December 2015, of which our share is $355 and $347 for the three months ended September 30, 2016 and June 30, 2016, respectively, and $1,047 for the nine months ended September 30, 2016.



	Three Months Ended						Nine Months Ended
Interest and Debt Expense:	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Interest expense	$	36,820	$	42,237	$	36,604	$	109,285	$	125,191
Amortization of deferred financing costs		1,458		584		1,405		4,121		1,754

Total interest and debt expense	$	38,278	$	42,821	$	38,009	$	113,406	$	126,945

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		FUNDS FROM OPERATIONS (“FFO”)

(unaudited and in thousands, except share and per share amounts)


	Three Months Ended									Nine Months Ended
	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
Reconciliation of net income to FFO and Core FFO:
Net income	$	4,469		$	9,357		$	7,910		$	4,892		$	1,078
Real estate depreciation and amortization (including pro rata share of unconsolidated joint ventures)		68,008			72,166			68,843			213,202			228,176

FFO ⁽¹⁾		72,477			81,523			76,753			218,094			229,254
Less FFO attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		(8,160	)		(144	)		147			(17,370	)
Consolidated joint ventures		(11,319	)		(8,934	)		(10,560	)		(30,026	)		(28,127	)

FFO attributable to Paramount Group Operating Partnership		61,001			64,429			66,049			188,215			183,757
Less FFO attributable to noncontrolling interests in Operating Partnership		(10,386	)		(12,619	)		(11,806	)		(34,109	)		(35,967	)

FFO attributable to common stockholders⁽¹⁾	$	50,615		$	51,810		$	54,243		$	154,106		$	147,790

Per diluted share	$	0.23		$	0.24		$	0.25		$	0.71		$	0.70


FFO	$	72,477		$	81,523		$	76,753		$	218,094		$	229,254
Non-core items:
Unrealized gain on interest rate swaps (including pro rata share of unconsolidated joint ventures)		(13,589	)		(15,809	)		(10,490	)		(30,939	)		(50,544	)
Acquisition and transaction related costs		282			485			508			1,725			3,960
Severance costs		—			—			—			2,874			3,315
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872
Predecessor income tax true-up		—			—			—			—			721

Core FFO ⁽¹⁾		59,170			66,199			66,771			191,754			192,578
Less Core FFO attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		(8,160	)		(144	)		147			(17,370	)
Consolidated joint ventures		(5,874	)		(5,400	)		(6,488	)		(17,776	)		(16,546	)

Core FFO attributable to Paramount Group Operating Partnership		53,139			52,639			60,139			174,125			158,662
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(9,047	)		(10,309	)		(10,750	)		(31,652	)		(31,054	)

Core FFO attributable to common stockholders ⁽¹⁾	$	44,092		$	42,330		$	49,389		$	142,473		$	127,608

Per diluted share	$	0.20		$	0.20		$	0.23		$	0.66		$	0.60

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		219,394,245			212,106,718			217,121,592			216,317,746			212,106,718
Effect of dilutive securities		24,385			1,361			15,965			—			4,004

Denominator for FFO per diluted share		219,418,630			212,108,079			217,137,557			216,317,746			212,110,722

⁽¹⁾	See page 43 for our definition of this measure.

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		FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)
(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
Reconciliation of Core FFO to FAD:
Core FFO	$	59,170		$	66,199		$	66,771		$	191,754		$	192,578
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		2,583			1,613			2,556			6,911			4,157
Amortization of deferred financing costs (including pro rata share of unconsolidated joint ventures)		1,509			635			1,456			4,274			1,907
Amortization of above and below-market leases, net		(3,112	)		(1,477	)		(7,100	)		(6,593	)		(3,239	)
Recurring tenant improvements, leasing commissions and other capital expenditures		(15,846	)		(12,444	)		(24,742	)		(59,663	)		(47,185	)
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(23,234	)		(17,671	)		(24,764	)		(67,968	)		(49,624	)
Unrealized loss from unconsolidated real estate funds		1,379			—			892			2,518			—
Unrealized gains on real estate fund investments		—			(1,830	)		—			—			(13,967	)

FAD ⁽¹⁾		22,449			35,025			15,069			71,233			84,627
Less FAD attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		(6,803	)		(144	)		147			(9,673	)
Consolidated joint ventures		226			(46	)		1,712			1,421			1,305

FAD attributable to Paramount Group Operating Partnership		22,518			28,176			16,637			72,801			76,259
Less FAD attributable to noncontrolling interests in Operating Partnership		(3,834	)		(5,519	)		(2,974	)		(13,363	)		(14,928	)

FAD attributable to common stockholders ^(1) (2)	$	18,684		$	22,657		$	13,663		$	59,438		$	61,331

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	FAD attributable to common stockholders on a quarterly basis is not necessarily indicative of future amounts due to fluctuations in the timing of payments for tenant improvements and leasing commissions versus rents received from leases for which such costs are incurred.

- 11 -


		EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)

(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
Reconciliation of net income to EBITDA and Adjusted EBITDA:
Net income	$	4,469		$	9,357		$	7,910		$	4,892		$	1,078
Add (subtract) adjustments to arrive at EBITDA:
Depreciation and amortization (including pro rata share of unconsolidated joint ventures)		68,008			72,166			68,843			213,202			228,176
Interest and debt expense (including pro rata share of unconsolidated joint ventures)		39,697			44,192			39,412			117,628			131,395
Income tax expense (benefit) (including pro rata share of unconsolidated joint ventures)		219			791			(1,398	)		(816	)		2,708

EBITDA⁽¹⁾		112,393			126,506			114,767			334,906			363,357
Less EBITDA attributable to noncontrolling interests in:
Consolidated real estate funds		(156	)		(8,999	)		(148	)		146			(19,998	)
Consolidated joint ventures		(18,373	)		(18,467	)		(17,499	)		(50,949	)		(54,861	)

Pro rata share of EBITDA ⁽¹⁾	$	93,864		$	99,040		$	97,120		$	284,103		$	288,498


EBITDA	$	112,393		$	126,506		$	114,767		$	334,906		$	363,357
Add (subtract) adjustments to arrive at adjusted EBITDA:
Unrealized gain on interest rate swaps (including pro rata share of unconsolidated joint ventures)		(13,589	)		(15,809	)		(10,490	)		(30,939	)		(50,544	)
EBITDA from real estate funds		1,073			(9,730	)		791			2,708			(26,759	)
Acquisition and transaction related costs		282			485			508			1,725			3,960
Severance costs		—			—			—			2,874			3,315
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872

Adjusted EBITDA ⁽¹⁾		100,159			101,452			105,576			311,274			299,201
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(12,927	)		(14,934	)		(13,427	)		(38,698	)		(43,281	)

Pro rata share of Adjusted EBITDA ⁽¹⁾	$	87,232		$	86,518		$	92,149		$	272,576		$	255,920

⁽¹⁾	See page 43 for our definition of this measure.

- 12 -


		NET OPERATING INCOME (“NOI”)

(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2016			September 30, 2015			June 30, 2016			September 30, 2016			September 30, 2015
Reconciliation of net income to NOI and Cash NOI:
Net income	$	4,469		$	9,357		$	7,910		$	4,892		$	1,078
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		66,376			70,654			67,287			208,475			223,658
General and administrative		13,235			6,666			12,139			39,335			28,412
Interest and debt expense		38,278			42,821			38,009			113,406			126,945
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872
Acquisition and transaction related costs		282			485			508			1,725			3,960
Income tax expense (benefit)		218			789			(1,398	)		(817	)		2,706
NOI from unconsolidated joint ventures		3,974			4,303			4,536			12,938			12,362
Income from real estate fund investments		—			(10,933	)		—			—			(30,226	)
Loss from unconsolidated real estate funds		1,254			—			960			2,540			—
Income from unconsolidated joint ventures		(1,792	)		(1,458	)		(2,003	)		(5,291	)		(4,444	)
Fee income		(3,976	)		(2,085	)		(4,175	)		(11,568	)		(5,400	)
Interest and other (income) loss, net		(2,299	)		1,763			(1,030	)		(5,029	)		397
Unrealized gain on interest rate swaps		(12,728	)		(15,772	)		(10,073	)		(29,661	)		(49,497	)

NOI ⁽¹⁾		107,291			106,590			112,670			330,945			315,823
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		(236	)		(147	)		146			(715	)
Consolidated joint ventures		(11,819	)		(14,926	)		(12,348	)		(35,436	)		(43,259	)

Pro rata share of NOI⁽¹⁾	$	95,315		$	91,428		$	100,175		$	295,655		$	271,849


NOI	$	107,291		$	106,590		$	112,670		$	330,945		$	315,823
Less:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(23,234	)		(17,671	)		(24,764	)		(67,968	)		(49,624	)
Amortization of above and below-market leases, net		(3,112	)		(1,477	)		(7,100	)		(6,593	)		(3,239	)

Cash NOI⁽¹⁾		80,945			87,442			80,806			256,384			262,960
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		(236	)		(147	)		146			(715	)
Consolidated joint ventures		(8,356	)		(9,983	)		(8,406	)		(24,606	)		(29,224	)

Pro rata share of Cash NOI ⁽¹⁾	$	72,432		$	77,223		$	72,253		$	231,924		$	233,021

⁽¹⁾	See page 43 for our definition of this measure.

- 13 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	4,469		$	8,562		$	797		$	7,091		$	(11,981	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		66,376			44,959			7,925			12,971			521
General and administrative		13,235			—			—			—			13,235
Interest and debt expense		38,278			17,630			5,198			14,064			1,386
Acquisition and transaction related costs		282			—			—			—			282
Income tax expense (benefit)		218			—			(1	)		4			215
NOI from unconsolidated joint ventures		3,974			3,893			—			—			81
Loss from unconsolidated real estate funds		1,254			—			—			—			1,254
Income from unconsolidated joint ventures		(1,792	)		(1,772	)		—			—			(20	)
Fee income		(3,976	)		—			—			—			(3,976	)
Interest and other income, net		(2,299	)		(48	)		(12	)		(5	)		(2,234	)
Unrealized gain on interest rate swaps		(12,728	)		(2,050	)		—			(10,678	)		—

NOI ⁽¹⁾		107,291			71,174			13,907			23,447			(1,237	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		—			—			—			(157	)
Consolidated joint ventures		(11,819	)		—			—			(11,819	)		—

Pro rata share of NOI for the three months ended September 30, 2016	$	95,315		$	71,174		$	13,907		$	11,628		$	(1,394	)

Pro rata share of NOI for the three months ended September 30, 2015	$	91,428		$	69,375		$	12,832		$	10,836		$	(1,615	)


NOI⁽¹⁾	$	107,291		$	71,174		$	13,907		$	23,447		$	(1,237	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(23,234	)		(18,754	)		(1,425	)		(3,027	)		(28	)
Amortization of above and below-market leases, net		(3,112	)		1,201			(549	)		(3,764	)		—

Cash NOI⁽¹⁾		80,945			53,621			11,933			16,656			(1,265	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(157	)		—			—			—			(157	)
Consolidated joint ventures		(8,356	)		—			—			(8,356	)		—

Pro rata share of Cash NOI for the three months ended September 30, 2016	$	72,432		$	53,621		$	11,933		$	8,300		$	(1,422	)

Pro rata share of Cash NOI for the three months ended September 30, 2015	$	77,223		$	61,652		$	10,543		$	6,668		$	(1,640	)

⁽¹⁾	See page 43 for our definition of this measure.

- 14 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Nine Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	4,892		$	28,679		$	2,582		$	13,508		$	(39,877	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		208,475			144,429			23,536			39,139			1,371
General and administrative		39,335			—			—			—			39,335
Interest and debt expense		113,406			52,186			15,460			41,693			4,067
Acquisition and transaction related costs		1,725			—			—			—			1,725
Income tax (benefit) expense		(817	)		—			(2,537	)		37			1,683
NOI from unconsolidated joint ventures		12,938			12,696			—			—			242
Loss from unconsolidated real estate funds		2,540			—			—			—			2,540
Income from unconsolidated joint ventures		(5,291	)		(5,233	)		—			—			(58	)
Fee income		(11,568	)		—			—			—			(11,568	)
Interest and other income, net		(5,029	)		(166	)		(43	)		(20	)		(4,800	)
Unrealized gain on interest rate swaps		(29,661	)		(5,640	)		—			(24,021	)		—

NOI ⁽¹⁾		330,945			226,951			38,998			70,336			(5,340	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		146			—			—			—			146
Consolidated joint ventures		(35,436	)		—			—			(35,436	)		—

Pro rata share of NOI for the nine months ended September 30, 2016	$	295,655		$	226,951		$	38,998		$	34,900		$	(5,194	)

Pro rata share of NOI for the nine months ended September 30, 2015	$	271,849		$	208,514		$	37,352		$	31,076		$	(5,093	)


NOI⁽¹⁾	$	330,945		$	226,951		$	38,998		$	70,336		$	(5,340	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(67,968	)		(54,723	)		(3,839	)		(9,409	)		3
Amortization of above and below-market leases, net		(6,593	)		6,889			(1,655	)		(11,827	)		—

Cash NOI⁽¹⁾		256,384			179,117			33,504			49,100			(5,337	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		146			—			—			—			146
Consolidated joint ventures		(24,606	)		—			—			(24,606	)		—

Pro rata share of Cash NOI for the nine months ended September 30, 2016	$	231,924		$	179,117		$	33,504		$	24,494		$	(5,191	)

Pro rata share of Cash NOI for the nine months ended September 30, 2015	$	233,021		$	187,425		$	31,266		$	19,428		$	(5,098	)

⁽¹⁾	See page 43 for our definition of this measure.

- 15 -


		SAME STORE RESULTS - BY SEGMENT
(unaudited and in thousands)


	Three Months Ended September 30, 2016
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the three months ended September 30, 2016	$	95,315		$	71,174		$	13,907		$	11,628		$	(1,394	)
Acquisitions ⁽²⁾		(3,563	)		(3,563	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(3,433	)		(3,348	)		—			(85	)		—
Other, net		289			207			4			78			—

Pro rata share of Same Store NOI⁽¹⁾ for the three months ended September 30, 2016	$	88,608		$	64,470		$	13,911		$	11,621		$	(1,394	)


	Three Months Ended September 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the three months ended September 30, 2015	$	91,428		$	69,375		$	12,832		$	10,836		$	(1,615	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(116	)		(105	)		—			(11	)		—
Other, net		5			—			—			5			—

Pro rata share of Same Store NOI⁽¹⁾ for the three months ended September 30, 2015	$	91,317		$	69,270		$	12,832		$	10,830		$	(1,615	)


(Decrease) increase in pro rata share of Same Store NOI	$	(2,709	)	$	(4,800	)	$	1,079		$	791		$	221

% (Decrease) increase		(3.0	%)		(6.9	%)		8.4	%		7.3	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents NOI from the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015.

- 16 -


		SAME STORE RESULTS - BY SEGMENT
(unaudited and in thousands)


	Three Months Ended September 30, 2016
SAME STORE CASH NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the three months ended September 30, 2016	$	72,432		$	53,621		$	11,933		$	8,300		$	(1,422	)
Acquisitions ⁽²⁾		(2,816	)		(2,816	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(3,433	)		(3,348	)		—			(85	)		—
Other, net		(158	)		(162	)		4			—			—

Pro rata share of Same Store Cash NOI⁽¹⁾ for the three months ended September 30, 2016	$	66,025		$	47,295		$	11,937		$	8,215		$	(1,422	)


	Three Months Ended September 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the three months ended September 30, 2015	$	77,223		$	61,652		$	10,543		$	6,668		$	(1,640	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(116	)		(105	)		—			(11	)		—
Other, net		5			—			—			5			—

Pro rata share of Same Store Cash NOI⁽¹⁾ for the three months ended September 30, 2015	$	77,112		$	61,547		$	10,543		$	6,662		$	(1,640	)


(Decrease) increase in pro rata share of Same Store Cash NOI	$	(11,087	)	$	(14,252	)	$	1,394		$	1,553		$	218

% (Decrease) increase		(14.4	%)		(23.2	%)		13.2	%		23.3	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents Cash NOI from the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015.

- 17 -


		SAME STORE RESULTS - BY SEGMENT
(unaudited and in thousands)


	Nine Months Ended September 30, 2016
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the nine months ended September 30, 2016	$	295,655		$	226,951		$	38,998		$	34,900		$	(5,194	)
Acquisitions ⁽²⁾		(11,136	)		(11,136	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(14,571	)		(14,422	)⁽³⁾		—			(149	)		—
Other, net		3,329			3,247	⁽⁴⁾		4			78			—

Pro rata share of Same Store NOI⁽¹⁾ for the nine months ended September 30, 2016	$	273,277		$	204,640		$	39,002		$	34,829		$	(5,194	)


	Nine Months Ended September 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the nine months ended September 30, 2015	$	271,849		$	208,514		$	37,352		$	31,076		$	(5,093	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(688	)		(463	)		—			(225	)		—
Other, net		25			(30	)		—			55			—

Pro rata share of Same Store NOI⁽¹⁾ for the nine months ended September 30, 2015	$	271,186		$	208,021		$	37,352		$	30,906		$	(5,093	)


Increase (decrease) in pro rata share of Same Store NOI	$	2,091		$	(3,381	)	$	1,650		$	3,923		$	(101	)

% Increase (decrease)		0.8	%		(1.6	%)		4.4	%		12.7	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents NOI from the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015.

⁽³⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

⁽⁴⁾

Includes an aggregate of $11,800 of non-cash write-offs primarily related to above-market lease asset from the termination of a tenant’s lease at 1633 Broadway, partially offset by $10,315 of income from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

- 18 -


		SAME STORE RESULTS - BY SEGMENT
(unaudited and in thousands)


	Nine Months Ended September 30, 2016
SAME STORE CASH NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the nine months ended September 30, 2016	$	231,924		$	179,117		$	33,504		$	24,494		$	(5,191	)
Acquisitions ⁽²⁾		(9,329	)		(9,329	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(14,571	)		(14,422	)⁽³⁾		—			(149	)		—
Other, net		315			311			4			—			—

Pro rata share of Same Store Cash NOI⁽¹⁾ for the nine months ended September 30, 2016	$	208,339		$	155,677		$	33,508		$	24,345		$	(5,191	)


	Nine Months Ended September 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the nine months ended September 30, 2015	$	233,021		$	187,425		$	31,266		$	19,428		$	(5,098	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(688	)		(463	)		—			(225	)		—
Other, net		25			(30	)		—			55			—

Pro rata share of Same Store Cash NOI⁽¹⁾ for the nine months ended September 30, 2015	$	232,358		$	186,932		$	31,266		$	19,258		$	(5,098	)


(Decrease) increase in pro rata share of Same Store Cash NOI	$	(24,019	)	$	(31,255	)	$	2,242		$	5,087		$	(93	)

% (Decrease) increase		(10.3	%)		(16.7	%)		7.2	%		26.4	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents Cash NOI from the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015.

⁽³⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

- 19 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - BALANCE SHEETS
(unaudited and in thousands)


	As of September 30, 2016								As of December 31, 2015
	Consolidated Joint Ventures						Consolidated Fund		Consolidated Joint Ventures						Consolidated Funds
	Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾		Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Real Estate Funds ⁽¹⁾
Paramount Ownership %				49.0%		24.4%		13.4%				49.0%		25.4%		Various
ASSETS:
Rental property, net	$	1,264,726	$	1,264,726	$	—	$	72,079	$	1,276,358	$	1,276,358	$	—	$	67,286
Cash and cash equivalents		9,965		9,549		416		1,180		7,115		6,539		576		14,495
Restricted cash		4,790		4,790		—		—		13,188		13,188		—		—
Real estate fund investments ⁽¹⁾		—		—		—		—		—		—		—		416,438
Preferred equity investments		54,807		—		54,807		—		53,941		—		53,941		—
Deferred rent receivable		27,796		27,796		—		—		18,386		18,386		—		—
Accounts and other receivables, net		798		798		—		179		327		327		—		287
Deferred charges, net		5,807		5,807		—		—		4,958		4,958		—		—
Intangible assets, net		56,241		56,241		—		—		71,305		71,305		—		—
Other assets		901		901		—		640		664		664		—		16

Total Assets	$	1,425,831	$	1,370,608	$	55,223	$	74,078	$	1,446,242	$	1,391,725	$	54,517	$	498,522


LIABILITIES:
Notes and mortgages payable, net	$	869,226	$	869,226	$	—	$	—	$	857,037	$	857,037	$	—	$	—
Loans payable to noncontrolling interests		—		—		—		—		—		—		—		45,662
Accounts payable and accrued expenses		21,566		21,566		—		1,609		28,548		28,548		—		936
Interest rate swap liabilities		31,383		31,383		—		—		55,404		55,404		—		—
Intangible liabilities, net		52,612		52,612		—		—		65,011		65,011		—		—
Other liabilities		109		108		1		—		2,888		2,659		229		184

Total Liabilities		974,896		974,895		1		1,609		1,008,888		1,008,659		229		46,782

EQUITY:
Paramount Group, Inc. equity		206,701		193,104		13,597		9,679		200,505		187,282		13,223		37,103
Noncontrolling interests		244,234		202,609		41,625		62,790		236,849		195,784		41,065		414,637

Total Equity		450,935		395,713		55,222		72,469		437,354		383,066		54,288		451,740

Total Liabilities and Equity	$	1,425,831	$	1,370,608	$	55,223	$	74,078	$	1,446,242	$	1,391,725	$	54,517	$	498,522

⁽¹⁾

On January 1, 2016, we adopted (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation, using the modified retrospective method, which resulted in the deconsolidation of all of our real estate fund investments that were accounted for at fair value, except for the Residential Development Fund, which is accounted for at historical cost and will continue to be consolidated into our financial statements.

- 20 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS
(unaudited and in thousands)


	Three Months Ended September 30, 2016											Three Months Ended September 30, 2015
	Consolidated Joint Ventures								Consolidated Fund			Consolidated Joint Ventures									Consolidated Funds
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			Total Consolidated Joint Ventures			31 West 52nd Street			One Market Plaza			Real Estate Funds ⁽¹⁾
Total revenues	$	31,441		$	31,441		$	—	$	881		$	47,100		$	17,944		$	29,156		$	863
Total operating expenses		7,994			7,994			—		417			14,024			6,757			7,267			307

Net operating income		23,447			23,447			—		464			33,076			11,187			21,889			556
Depreciation and amortization		(12,971	)		(12,971	)		—		(259	)		(19,402	)		(6,540	)		(12,862	)		(259	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			—			—			10,933
Interest and other income, net		1,465			5			1,460		—			19			16			3			1
Interest and debt expense		(14,064	)		(14,064	)		—		—			(20,313	)		(5,339	)		(14,974	)		(840	)
Unrealized gain on interest rate swaps		10,678			10,678			—		—			7,497			1,899			5,598			—

Net income (loss) before income taxes		8,555			7,095			1,460		205			877			1,223			(346	)		10,391
Income tax (expense) benefit		(4	)		(4	)		—		—			30			—			30			—

Net income (loss)	$	8,551		$	7,091		$	1,460	$	205		$	907		$	1,223		$	(316	)	$	10,391



Paramount Group, Inc.’s pro rata share Ownership %	Total			49.0%			24.4%		13.4%			Total			64.2%			49.0%			Various
Net income (loss)	$	3,708		$	3,353		$	355	$	27		$	630		$	785		$	(155	)	$	520
Add: Management fee income		140			140			—		245			244			133			111			1,618
Add: Carried interest		—			—			—		—			—			—			—			317

Net income (loss) attributable to Paramount Group, Inc.		3,848			3,493			355		272			874			918			(44	)		2,455
Add: Real estate depreciation and amortization		6,355			6,355			—		35			10,501			4,199			6,302			35

FFO ⁽²⁾		10,203			9,848			355		307			11,375			5,117			6,258			2,490
Less: Unrealized gain on interest rate swaps		(5,233	)		(5,233	)		—		—			(3,963	)		(1,220	)		(2,743	)		—

Core FFO ⁽²⁾	$	4,970		$	4,615		$	355	$	307		$	7,412		$	3,897		$	3,515		$	2,490



Noncontrolling Interests’ pro rata share Ownership %	Total			51.0%			75.6%		86.6%			Total			35.8%			51.0%			Various
Net income (loss)	$	4,843		$	3,738		$	1,105	$	178		$	277		$	438		$	(161	)	$	9,871
Less: Management fee expense		(140	)		(140	)		—		(245	)		(244	)		(133	)		(111	)		(1,618	)
Less: Carried interest		—			—			—		—			—			—			—			(317	)

Net income (loss) attributable to noncontrolling interests		4,703			3,598			1,105		(67	)		33			305			(272	)		7,936
Add: Real estate depreciation and amortization		6,616			6,616			—		224			8,901			2,341			6,560			224

FFO ⁽²⁾		11,319			10,214			1,105		157			8,934			2,646			6,288			8,160
Less: Unrealized gain on interest rate swaps		(5,445	)		(5,445	)		—		—			(3,534	)		(679	)		(2,855	)		—

Core FFO ⁽²⁾	$	5,874		$	4,769		$	1,105	$	157		$	5,400		$	1,967		$	3,433		$	8,160

⁽¹⁾

On January 1, 2016, we adopted (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation, using the modified retrospective method, which resulted in the deconsolidation of all of our real estate fund investments that were accounted for at fair value, except for the Residential Development Fund, which is accounted for at historical cost and will continue to be consolidated into our financial statements.

⁽²⁾	See page 43 for our definition of this measure.

- 21 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS
(unaudited and in thousands)


	Nine Months Ended September 30, 2016											Nine Months Ended September 30, 2015
	Consolidated Joint Ventures								Consolidated Fund			Consolidated Joint Ventures									Consolidated Funds
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			Total Consolidated Joint Ventures			31 West 52nd Street			One Market Plaza			Real Estate Funds ⁽¹⁾
Total revenues	$	92,762		$	92,762		$	—	$	2,548		$	136,202		$	52,382		$	83,820		$	2,600
Total operating expenses		22,426			22,426			—		1,876			40,043			18,982			21,061			1,207

Net operating income		70,336			70,336			—		672			96,159			33,400			62,759			1,393
Depreciation and amortization		(39,139	)		(39,139	)		—		(776	)		(59,093	)		(19,591	)		(39,502	)		(800	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			—			—			30,226
Interest and other income, net		4,319			20			4,299		1			55			47			8			1
Interest and debt expense		(41,693	)		(41,693	)		—		—			(57,091	)		(15,713	)		(41,378	)		(2,626	)
Unrealized gain on interest rate swaps		24,021			24,021			—		—			24,686			6,634			18,052			—

Net income (loss) before income taxes		17,844			13,545			4,299		(103	)		4,716			4,777			(61	)		28,194
Income tax expense		(37	)		(37	)		—		(2	)		(11	)		—			(11	)		(4	)

Net income (loss)	$	17,807		$	13,508		$	4,299	$	(105	)	$	4,705		$	4,777		$	(72	)	$	28,190



Paramount Group, Inc.’s pro rata share Ownership %	Total			49.0%			24.4%		13.4%			Total			64.2%			49.0%			Various
Net income (loss)	$	7,309		$	6,262		$	1,047	$	(14	)	$	3,032		$	3,067		$	(35	)	$	1,616
Add: Management fee income		436			436			—		728			709			382			327			4,473
Add: Carried interest		—			—			—		—			—			—			—			5,424

Net income attributable to Paramount Group, Inc.		7,745			6,698			1,047		714			3,741			3,449			292			11,513
Add: Real estate depreciation and amortization		19,175			19,175			—		104			31,930			12,577			19,353			107

FFO ⁽²⁾		26,920			25,873			1,047		818			35,671			16,026			19,645			11,620
Less: Unrealized gain on interest rate swaps		(11,771	)		(11,771	)		—		—			(13,105	)		(4,260	)		(8,845	)		—

Core FFO ⁽²⁾	$	15,149		$	14,102		$	1,047	$	818		$	22,566		$	11,766		$	10,800		$	11,620



Noncontrolling Interests’ pro rata share Ownership %	Total			51.0%			75.6%		86.6%			Total			35.8%			51.0%			Various
Net income (loss)	$	10,498		$	7,246		$	3,252	$	(91	)	$	1,673		$	1,710		$	(37	)	$	26,574
Less: Management fee expense		(436	)		(436	)		—		(728	)		(709	)		(382	)		(327	)		(4,473	)
Less: Carried interest		—			—			—		—			—			—			—			(5,424	)

Net income (loss) attributable to noncontrolling interests		10,062			6,810			3,252		(819	)		964			1,328			(364	)		16,677
Add: Real estate depreciation and amortization		19,964			19,964			—		672			27,163			7,014			20,149			693

FFO ⁽²⁾		30,026			26,774			3,252		(147	)		28,127			8,342			19,785			17,370
Less: Unrealized gain on interest rate swaps		(12,250	)		(12,250	)		—		—			(11,581	)		(2,374	)		(9,207	)		—

Core FFO ⁽²⁾	$	17,776		$	14,524		$	3,252	$	(147	)	$	16,546		$	5,968		$	10,578		$	17,370

⁽¹⁾

⁽²⁾	See page 43 for our definition of this measure.

- 22 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS
(unaudited and in thousands)


	As of September 30, 2016									As of December 31, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Paramount Ownership %				50.0%			9.5%						50.0%			9.5%
ASSETS:
Rental property, net	$	214,881		$	208,578		$	6,303		$	220,765		$	214,139		$	6,626
Cash and cash equivalents		16,488			15,885			603			18,388			17,341			1,047
Restricted cash		—			—			—			323			323			—
Deferred rent receivable		12,729			12,729			—			12,479			12,479			—
Accounts and other receivables, net		739			739			—			1,179			1,179			—
Deferred charges, net		9,256			9,256			—			9,704			9,704			—
Other assets		4,334			3,925			409			492			311			181

Total Assets	$	258,427		$	251,112		$	7,315		$	263,330		$	255,476		$	7,854

LIABILITIES:
Notes and mortgages payable, net	$	269,025		$	245,888		$	23,137		$	269,725		$	245,582		$	24,143
Accounts payable and accrued expenses		4,570			4,493			77			5,450			5,324			126
Interest rate swap liabilities		6,589			6,589			—			9,146			9,146			—
Other liabilities		350			242			108			649			530			119

Total Liabilities		280,534			257,212			23,322			284,970			260,582			24,388

Total Equity		(22,107	)		(6,100	)		(16,007	)		(21,640	)		(5,106	)		(16,534	)

Total Liabilities and Equity	$	258,427		$	251,112		$	7,315		$	263,330		$	255,476		$	7,854

⁽¹⁾ We account for our interest in Oder-Center, Germany on a one quarter lag basis.

- 23 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended September 30, 2016									Three Months Ended September 30, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	15,059		$	13,867		$	1,192		$	14,977		$	13,921		$	1,056
Total operating expenses		6,338			6,081			257			5,640			5,500			140

Net operating income		8,721			7,786			935			9,337			8,421			916
Depreciation and amortization expense		(3,299	)		(3,193	)		(106	)		(3,041	)		(2,945	)		(96	)
Interest and other income, net		16			16			—			3			3			—
Interest and debt expense		(3,084	)		(2,787	)		(297	)		(2,970	)		(2,687	)		(283	)
Unrealized gain on interest rate swaps		1,722			1,722			—			74			74			—

Net income before income taxes		4,076			3,544			532			3,403			2,866			537
Income tax expense		(3	)		—			(3	)		(2	)		—			(2	)

Net income	$	4,073		$	3,544		$	529		$	3,401		$	2,866		$	535



Paramount Group, Inc.’s pro rata share Ownership %	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	1,822		$	1,772		$	50		$	1,484		$	1,433		$	51
Less: Step-up basis adjustment		(30	)		—			(30	)		(26	)		—			(26	)

Net income attributable to Paramount Group, Inc.		1,792			1,772			20			1,458			1,433			25
Add: Real estate depreciation and amortization		1,632			1,597			35			1,512			1,472			40

FFO ⁽²⁾		3,424			3,369			55			2,970			2,905			65
Less: Unrealized gain on interest rate swaps		(861	)		(861	)		—			(37	)		(37	)		—

Core FFO⁽²⁾	$	2,563		$	2,508		$	55		$	2,933		$	2,868		$	65



Joint Venture Partners’ pro rata share Ownership %	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	2,251		$	1,772		$	479		$	1,917		$	1,433		$	484
Add: Real estate depreciation and amortization		1,697			1,596			101			1,561			1,472			89

FFO ⁽²⁾		3,948			3,368			580			3,478			2,905			573
Less: Unrealized gain on interest rate swaps		(861	)		(861	)		—			(37	)		(37	)		—

Core FFO⁽²⁾	$	3,087		$	2,507		$	580		$	3,441		$	2,868		$	573

⁽¹⁾	We account for our interest in Oder-Center, Germany on a one quarter lag basis.

⁽²⁾	See page 43 for our definition of this measure.

- 24 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Nine Months Ended September 30, 2016									Nine Months Ended September 30, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	45,693		$	42,465		$	3,228		$	45,111		$	41,726		$	3,385
Total operating expenses		17,749			17,073			676			18,012			17,557			455

Net operating income		27,944			25,392			2,552			27,099			24,169			2,930
Depreciation and amortization expense		(9,533	)		(9,244	)		(289	)		(9,134	)		(8,829	)		(305	)
Interest and other income, net		49			49			—			9			8			1
Interest and debt expense		(9,111	)		(8,287	)		(824	)		(9,632	)		(8,726	)		(906	)
Unrealized gain on interest rate swaps		2,556			2,556			—			2,094			2,094			—

Net income before income taxes		11,905			10,466			1,439			10,436			8,716			1,720
Income tax expense		(7	)		—			(7	)		(19	)		—			(19	)

Net income	$	11,898		$	10,466		$	1,432		$	10,417		$	8,716		$	1,701


Paramount Group, Inc.’s pro rata share Ownership %	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	5,369		$	5,233		$	136		$	4,520		$	4,358		$	162
Less: Step-up basis adjustment		(78	)		—			(78	)		(76	)		—			(76	)

Net income attributable to Paramount Group, Inc.		5,291			5,233			58			4,444			4,358			86
Add: Real estate depreciation and amortization		4,727			4,622			105			4,518			4,414			104

FFO ⁽²⁾		10,018			9,855			163			8,962			8,772			190
Less: Unrealized gain on interest rate swaps		(1,278	)		(1,278	)		—			(1,047	)		(1,047	)		—

Core FFO⁽²⁾	$	8,740		$	8,577		$	163		$	7,915		$	7,725		$	190


Joint Venture Partners’ pro rata share Ownership %	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	6,529		$	5,233		$	1,296		$	5,897		$	4,358		$	1,539
Add: Real estate depreciation and amortization		4,884			4,622			262			4,698			4,414			284

FFO ⁽²⁾		11,413			9,855			1,558			10,595			8,772			1,823
Less: Unrealized gain on interest rate swaps		(1,278	)		(1,278	)		—			(1,047	)		(1,047	)		—

Core FFO⁽²⁾	$	10,135		$	8,577		$	1,558		$	9,548		$	7,725		$	1,823

⁽¹⁾	We account for our interest in Oder-Center, Germany on a one quarter lag basis.

⁽²⁾	See page 43 for our definition of this measure.

- 25 -


		UNCONSOLIDATED FUNDS SUMMARY

(unaudited)

Property Funds:

The following is a summary of the Property Funds, our ownership interests in these funds and the funds’ ownership interest in the underlying investments, as of September 30, 2016.


Fund	Paramount Ownership			60 Wall Street			One Market Plaza			50 Beale Street			Zero Bond Street ⁽¹⁾
Fund II		10.0	%		46.3	%		—			—			—
Fund III		3.1	%		16.0	%		2.0	%		—			—
Fund VII/VII-H		7.2	%		—			—			42.8	%		100.0	%

Total Property Funds					62.3	%		2.0	%		42.8	%		100.0	%
Other Investors					37.7	%		98.0	%⁽²⁾		57.2	%		—

Total					100.0	%		100.0	%		100.0	%		100.0	%

The following is a summary of the Property Fund investments and our ownership interests in the underlying investments, as of September 30, 2016.


		Paramount			Square		%			%			Annualized Rent ⁽³⁾
Investments	Submarket	Ownership			Feet		Leased			Occupied			Amount			Per Square Foot ⁽⁴⁾
60 Wall Street	Downtown		5.1	%		1,625,483		100.0	%		100.0	%	$	67,000,000	⁽⁵⁾	$	41.22	⁽⁵⁾
50 Beale Street	South Financial District		3.1	%		663,483		82.6	%		82.6	%		29,585,000			54.25
Zero Bond Street ⁽¹⁾	NoHo		7.2	%		64,390		46.6	%		46.6	%		3,810,000			126.94

⁽¹⁾	Formerly called 670 Broadway

⁽²⁾	Includes a 49.0% direct ownership interest held by us.

⁽³⁾	See page 43 for our definition of this measure.

⁽⁴⁾	Excludes square feet and revenue from parking, storage, signage and roof space.

⁽⁵⁾	Represents triple net base rent only.

Alternative Investment Fund (“Fund VIII”):

The following is a summary of our ownership interests in Fund VIII and the underlying investments in Fund VIII, as of September 30, 2016.


		Paramount			Fixed /						Face Amount				Fair Value
Investments	Investment Type	Ownership			Variable rate	Interest Rate			Initial Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000,000	$	645,000	$	50,693,000	$	654,000
1440 Broadway	Mezzanine Loan		1.3	%	Variable (LIBOR plus 600 bps)		6.53	%		Oct-2019		40,000,000		516,000		40,052,000		517,000
700 Eighth Avenue	Mortgage/Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		6.53	%		Dec-2016		80,000,000		1,032,000		80,358,000		1,037,000
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000,000		710,000		55,848,000		720,000
Other	Mezzanine Loan		1.3	%	Variable (LIBOR plus 700 bps)		7.52	%		Oct-2018		15,757,000		203,000		15,757,000		203,000

											$	240,757,000	$	3,106,000	$	242,708,000	$	3,131,000

- 26 -


		CAPITAL STRUCTURE

(unaudited and in thousands, except share and per share amounts)


					As of September 30, 2016
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,039,149
$1.0 billion revolving credit facility						50,000

						3,089,149
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza)						(443,305	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,448

Pro rata share of total debt ⁽²⁾						2,771,292


	Shares / Units Outstanding		Share Price at September 30, 2016
Equity:
Common stock		219,611,535	$	16.39		3,599,433
Operating Partnership units		44,916,828		16.39		736,187

Total equity		264,528,363		16.39		4,335,620

Total Market Capitalization					$	7,106,912

⁽¹⁾	Represents contractual amount due pursuant to the respective debt agreements.

⁽²⁾	See page 43 for our definition of this measure.

- 27 -


		DEBT ANALYSIS

(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
Consolidated Debt:	Amount			Rate			Amount			Rate			Amount			Rate
1633 Broadway	$	1,013,544			3.52	%	$	1,000,000			3.54	%	$	13,544			2.27	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
900 Third Avenue ⁽¹⁾		274,337			4.26	%		162,000			5.98	%		112,337			1.79	%
Waterview ⁽¹⁾		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		88,042			4.88	%		88,042			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		869,226			6.12	%		859,648			6.13	%		9,578			4.73	%
$1.0 Billion Revolving Credit Facility		50,000			1.77	%		—			—			50,000			1.77	%

Total consolidated debt		3,089,149			4.55	%		2,903,690			4.72	%		185,459			1.97	%
Noncontrolling interest’s share		(443,305	)		6.12	%		(438,420	)		6.13	%		(4,885	)		4.73	%

Pro rata share of consolidated debt	$	2,645,844			4.29	%	$	2,465,270			4.47	%	$	180,574			1.90	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.32	%	$	135,000			5.78	%	$	111,500			2.56	%
Oder-Center, Germany		23,137			4.62	%		23,137			4.62	%		—			—

Total unconsolidated debt		269,637			4.35	%		158,137			5.61	%		111,500			2.56	%
Joint venture partners’ share		(144,189	)		4.37	%		(88,439	)		5.50	%		(55,750	)		2.56	%

Pro rata share of unconsolidated debt	$	125,448			4.33	%	$	69,698			5.74	%	$	55,750			2.56	%

Pro Rata Share of Total Debt ⁽²⁾	$	2,771,292			4.29	%	$	2,534,968			4.50	%	$	236,324			2.05	%


Revolving Credit Facility Covenants: ⁽³⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		39.0	%
Secured Debt / Total Assets	Less than 50%		35.3	%
Fixed Charge Coverage	Greater than 1.5x		2.5x
Unsecured Debt / Unencumbered Assets	Less than 60%		14.8	%
Unencumbered Interest Coverage	Greater than 1.75x		17.2x


Debt Composition:	Amount		%
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,465,270
Pro rata unconsolidated fixed rate debt		69,698

Total fixed rate debt		2,534,968		91.5	%

Variable rate debt:
Pro rata consolidated variable rate debt		180,574
Pro rata unconsolidated variable rate debt		55,750

Total variable rate debt		236,324		8.5	%

Pro Rata Share of Total Debt ⁽²⁾	$	2,771,292		100.0	%

⁽¹⁾	In October 2016, we completed an $850,000 financing of 1301 Avenue of the Americas and used the net proceeds to repay our 2017 debt maturities at 900 Third Avenue and Waterview.

⁽²⁾	See page 43 for our definition of this measure.

⁽³⁾

This section presents ratios as of September 30, 2016 in accordance with the terms of the Company’s revolving credit facility, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the revolving credit facility.

- 28 -


		DEBT MATURITIES

(unaudited and in thousands)


Consolidated Debt:	2016		2017			2018			2019			2020			Thereafter			Total
900 Third Avenue	$	—	$	274,337	⁽¹⁾	$	—		$	—		$	—		$	—		$	274,337
Waterview		—		210,000	⁽¹⁾		—			—			—			—			210,000
Liberty Place		—		—			84,000			—			—			—			84,000
One Market Plaza		—		—			—			869,226			—			—			869,226
1899 Pennsylvania Avenue		—		—			—			—			88,042			—			88,042
1633 Broadway		—		—			—			—			—			1,013,544			1,013,544
31 West 52nd Street		—		—			—			—			—			500,000			500,000
Revolving Credit Facility		—		—			50,000			—			—			—			50,000

Total consolidated debt		—		484,337			134,000			869,226			88,042			1,513,544			3,089,149
Noncontrolling interest’s share		—		—			—			(443,305	)		—			—			(443,305	)

Pro rata share of consolidated debt	$	—	$	484,337		$	134,000		$	425,921		$	88,042		$	1,513,544		$	2,645,844


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—		$	246,500		$	—		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			23,137			23,137

Total unconsolidated debt		—		—			246,500			—			—			23,137			269,637
Joint venture partners’ share		—		—			(123,250	)		—			—			(20,939	)		(144,189	)

Pro rata share of unconsolidated debt	$	—	$	—		$	123,250		$	—		$	—		$	2,198		$	125,448

Pro rata share of total debt	$	—	$	484,337		$	257,250		$	425,921		$	88,042		$	1,515,742		$	2,771,292


Weighted average rate		—		4.91	%		3.88	%		6.12	%		4.88	%		3.62	%		4.29	%

% of debt maturing		—		17.5	%		9.3	%		15.4	%		3.2	%		54.6	%		100.0	%

⁽¹⁾	Repaid in October 2016.

- 29 -


		PORTFOLIO SUMMARY

(unaudited)


		%			Square		%			%			Annualized Rent ⁽²⁾
Property	Submarket	Ownership			Feet ⁽¹⁾		Leased ⁽²⁾			Occupied ⁽²⁾			Amount		Per Square Foot ⁽³⁾
As of September 30, 2016
New York:
1633 Broadway	West Side		100.0	%		2,643,065		86.9	%		84.1	%	$	145,926,000	$	71.44
1301 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		1,767,992		89.8	%		85.7	%		113,175,000		75.07
1325 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		814,892		96.9	%		96.9	%		50,992,000		65.78
31 West 52nd Street	Sixth Ave / Rock Center		100.0	%		786,647		85.3	%		85.3	%		54,232,000		81.10
900 Third Avenue	East Side		100.0	%		596,270		98.0	%		96.0	%		41,785,000		73.63
712 Fifth Avenue	Madison / Fifth Ave		50.0	%		543,341		98.9	%		94.7	%		54,579,000		106.64

Subtotal / Weighted Average						7,152,207		90.4	%		87.9	%		460,689,000		75.92

Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		98.9	%		34,964,000		52.56
425 Eye Street	East End		100.0	%		380,090		97.7	%		97.3	%		16,279,000		45.11
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		73.8	%		62.1	%		10,112,000		77.89
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		98.3	%		98.3	%		14,890,000		81.53
Liberty Place	East End		100.0	%		174,205		89.9	%		87.1	%		11,885,000		77.69

Subtotal / Weighted Average						1,602,655		94.3	%		92.4	%		88,130,000		59.15

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		98.8	%		96.8	%		99,605,000		64.84

Total / Weighted Average						10,365,987		92.3	%		90.0	%	$	648,424,000	$	71.32

⁽¹⁾	Represents the remeasured square feet, which includes an aggregate of 142,636 square feet of either Real Estate Board of New York (“REBNY”) or Building Owners and Managers Association (“BOMA”) remeasurement adjustments that are not reflected in current leases.

⁽²⁾	See page 43 for our definition of this measure.

⁽³⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

- 30 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION

(unaudited)


	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
Top 10 Tenants:	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
As of September 30, 2016
Barclays Capital, Inc.		Dec-2020	⁽²⁾		538,518	⁽²⁾		5.2	%	$	35,471,000	$	65.87		5.5	%
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%		32,761,000		52.41		5.1	%
Allianz Global Investors, LP		Jan-2031	⁽³⁾		326,457	⁽³⁾		3.1	%		28,260,000		86.57		4.4	%
Clifford Chance LLP		Jun-2024			328,992			3.2	%		26,029,000		79.12		4.0	%
Credit Agricole Corporate & Investment Bank		Feb-2023			311,291			3.0	%		24,726,000		79.43		3.8	%
Morgan Stanley & Company		Mar-2032	⁽⁴⁾		312,885	⁽⁴⁾		3.0	%		22,122,000		70.70		3.4	%
Google, Inc.		Apr-2025			287,661			2.8	%		17,710,000		61.57		2.7	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,753,000		57.08		2.6	%
Chadbourne & Parke, LLP		Sep-2024			203,863			2.0	%		16,129,000		79.12		2.5	%
Showtime Networks, Inc		Jun-2021			238,880			2.3	%		14,179,000		59.36		2.2	%


	Square Feet		% of Occupied			Annualized		% of Annualized
Industry Diversification:	Occupied		Square Feet			Rent		Rent
As of September 30, 2016
Legal Services		1,930,227		21.1	%	$	144,414,000		22.3	%
Financial Services - Commercial and Investment Banking		1,661,098		18.1	%		119,642,000		18.5	%
Financial Services, all others		1,368,392		14.9	%		111,273,000		17.2	%
Technology and Media		1,444,917		15.8	%		93,035,000		14.3	%
Insurance		338,399		3.7	%		28,958,000		4.5	%
Retail		321,606		3.5	%		27,002,000		4.2	%
Government		334,985		3.7	%		15,805,000		2.4	%
Real Estate		205,835		2.2	%		15,649,000		2.4	%
Consumer Products		144,491		1.6	%		10,429,000		1.6	%
Other		1,409,084		15.4	%		82,217,000		12.6	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	41,100 of the square feet leased expires on December 31, 2016.

⁽³⁾	5,546 of the square feet leased expires on December 31, 2016.

⁽⁴⁾	52,056 of the square feet leased expires on June 30, 2017.

- 31 -


		LEASING ACTIVITY

(unaudited)


	Total ⁽¹⁾			New York ⁽¹⁾			Washington, D.C.			San Francisco
Three Months Ended September 30, 2016:
Total square feet leased		188,840			139,935			30,727			18,178
Pro rata share of total square feet leased:		175,850			136,216			30,727			8,907
Initial rent ⁽²⁾	$	60.91		$	56.17		$	70.51		$	107.03
Weighted average lease term (in years)		8.6			8.1			12.1			5.4
Tenant improvements and leasing commissions:
Per square foot	$	46.94		$	19.44		$	178.21		$	38.37
Per square foot per annum	$	5.44		$	2.41		$	14.70		$	7.13
Percentage of initial rent		8.9	%		4.3	%		20.8	%		6.7	%
Rent concessions:
Average free rent period (in months)		3.2			2.8			5.3			2.5
Average free rent period per annum (in months)		0.4			0.3			0.4			0.5
Second generation space: ⁽²⁾
Square feet		142,623			133,716			—			8,907
GAAP basis:
Straight-line rent	$	55.73		$	52.21		$	—		$	114.78
Prior straight-line rent	$	42.97		$	41.42		$	—		$	68.91
Percentage increase		29.7	%⁽³⁾		26.1	%⁽³⁾		—			66.6	%
Cash basis
Initial rent ⁽²⁾	$	57.65		$	54.71		$	—		$	107.03
Prior escalated rent	$	54.34		$	52.28		$	—		$	88.96
Percentage increase		6.1	%⁽³⁾		4.7	%⁽³⁾		—			20.3	%

⁽¹⁾	The leasing statistics include the effect of a lease for the parking garage at 1633 Broadway. Excluding the effect of this lease, the initial rent was $84.93 for our New York portfolio and $82.50 for the total portfolio.

⁽²⁾	See page 43 for our definition of this measure.

⁽³⁾

Includes the effect of a 36,580 square foot above-market lease that was terminated and subsequently released at market rates. Excluding the impact of this lease, the percentage increase in GAAP basis and Cash basis rents was 24.9% and 23.1%, respectively, for our New York portfolio and 31.0% and 22.6%, respectively, for the total portfolio.

- 32 -


		LEASING ACTIVITY

(unaudited)


	Total ⁽¹⁾			New York ⁽¹⁾			Washington, D.C.			San Francisco
Nine Months Ended September 30, 2016:
Total square feet leased		492,687			361,033			68,872			62,782
Pro rata share of total square feet leased:		431,534			331,899			68,872			30,763
Initial rent ⁽²⁾	$	70.18		$	68.02		$	71.13		$	94.51
Weighted average lease term (in years)		7.7			7.7			8.4			5.7
Tenant improvements and leasing commissions:
Per square foot	$	52.18		$	42.20		$	108.15		$	33.15
Per square foot per annum	$	6.79		$	5.48		$	12.89		$	5.81
Percentage of initial rent		9.7	%		8.1	%		18.1	%		6.1	%
Rent concessions:
Average free rent period (in months)		5.3			5.8			4.5			1.2
Average free rent period per annum (in months)		0.7			0.8			0.5			0.2
Second generation space: ⁽²⁾
Square feet		275,719			243,741			3,933			28,045
GAAP basis:
Straight-line rent	$	68.12		$	64.87		$	80.13		$	96.32
Prior straight-line rent	$	57.32		$	55.37		$	80.10		$	71.96
Percentage increase		18.8	%⁽³⁾		17.2	%⁽³⁾		0.0	%		33.8	%
Cash basis:
Initial rent ⁽²⁾	$	70.69		$	67.97		$	79.82		$	94.51
Prior escalated rent	$	67.31		$	67.17		$	78.95		$	66.81
Percentage increase		5.0	%⁽³⁾		1.2	%⁽³⁾		1.1	%		41.4	%

⁽¹⁾	The leasing statistics include the effect of a lease for the parking garage at 1633 Broadway. Excluding the effect of this lease, the intial rent was $78.59 for our New York portfolio and $78.35 for the total portfolio.

⁽²⁾	See page 43 for our definition of this measure.

⁽³⁾

Includes the effect of two above-market leases aggregating 89,135 square feet that were terminated and subsequently released at market rates. Excluding the impact of these leases, the percentage increase in GAAP basis and Cash basis rents was 24.1% and 20.9%, respectively, for our New York portfolio and 25.3% and 24.1%, respectively, for the total portfolio.

- 33 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of Total Portfolio
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		3,497	$	344,000	$	—		0.1	%

4Q 2016		25,381		2,214,000		89.43		0.3	%

1Q 2017		312,189		21,530,000		69.69		3.2	%
2Q 2017		32,698		2,574,000		78.44		0.4	%
3Q 2017		59,406		4,010,000		67.51		0.6	%
4Q 2017		67,776		5,708,000		85.94		0.9	%

Total 2017		472,069		33,822,000		72.33		5.1	%

2018		340,904		27,530,000		80.73		4.1	%
2019		534,647		40,083,000		75.20		6.0	%
2020		464,240		36,347,000		78.33		5.5	%
2021		1,543,810		95,650,000		62.81		14.4	%
2022		438,114		28,934,000		76.59		4.3	%
2023		649,065		50,442,000		78.21		7.6	%
2024		652,521		51,396,000		78.97		7.7	%
2025		509,770		38,632,000		75.91		5.8	%
Thereafter		3,760,429		261,132,000		69.36		39.1	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

- 34 -


		LEASE EXPIRATIONS - NEW YORK

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of New York
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		575	$	110,000	$	—		0.0	%

4Q 2016		21,056		1,862,000		88.26		0.4	%

1Q 2017		306,106		21,244,000		70.15		4.5	%
2Q 2017		32,698		2,574,000		78.44		0.5	%
3Q 2017		55,663		3,688,000		66.26		0.8	%
4Q 2017		49,605		4,703,000		97.52		1.0	%

Total 2017		444,072		32,209,000		73.27		6.8	%

2018		248,666		21,737,000		87.35		4.6	%
2019		259,706		21,979,000		86.10		4.6	%
2020		332,652		26,903,000		80.93		5.7	%
2021		894,429		61,378,000		71.00		12.9	%
2022		161,405		9,518,000		111.58		2.0	%
2023		508,849		39,042,000		77.25		8.2	%
2024		569,605		44,935,000		79.11		9.5	%
2025		113,903		10,155,000		89.15		2.1	%
Thereafter		2,826,006		205,381,000		73.36		43.2	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Excludes square feet and revenue from parking, storage, theater and roof space.

- 35 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of Washington, D.C.
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		—	$	—	$	—		—

4Q 2016		—		—		—		—

1Q 2017		—		—		—		—
2Q 2017		—		—		—		—
3Q 2017		—		—		—		—
4Q 2017		—		—		—		—

Total 2017		—		—		—		—

2018		—		—		—		—
2019		42,081		3,308,000		74.48		3.7	%
2020		33,721		2,468,000		73.18		2.7	%
2021		307,305		15,120,000		47.54		16.8	%
2022		33,002		1,618,000		49.02		1.8	%
2023		140,216		11,400,000		81.69		12.7	%
2024		75,864		5,822,000		76.88		6.5	%
2025		56,124		4,427,000		78.88		4.9	%
Thereafter		781,771		45,768,000		56.06		50.9	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Excludes square feet and revenue from parking, storage and signage.

- 36 -


		LEASE EXPIRATIONS - SAN FRANCISCO

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of San Francisco
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		2,922	$	234,000	$	—		0.2	%

4Q 2016		4,325		352,000		96.63		0.3	%

1Q 2017		6,083		286,000		47.00		0.3	%
2Q 2017		—		—		—		—
3Q 2017		3,743		322,000		86.14		0.3	%
4Q 2017		18,171		1,005,000		55.31		1.0	%

Total 2017		27,997		1,613,000		57.63		1.6	%

2018		92,238		5,793,000		62.85		5.7	%
2019		232,860		14,796,000		63.53		14.6	%
2020		97,867		6,976,000		71.28		6.9	%
2021		342,076		19,152,000		56.05		18.9	%
2022		243,707		17,798,000		73.03		17.6	%
2023		—		—		—		—
2024		7,052		639,000		90.60		0.6	%
2025		339,743		24,050,000		70.94		23.7	%
Thereafter		152,652		9,983,000		65.87		9.9	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Excludes square feet and revenue from parking, storage and roof space.

- 37 -


		CASH BASIS CAPITAL EXPENDITURES - TOTAL PORTFOLIO

(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	6,502	$	3,919	$	2,241	$	12,916	$	9,161
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	6,502	$	3,919	$	2,241	$	12,916	$	9,161

Tenant improvements:
Recurring⁽¹⁾	$	7,149	$	4,221	$	19,523	$	40,248	$	26,821
Non-recurring⁽¹⁾		16,833		10,555		13,603		36,467		13,679

Total tenant improvements	$	23,982	$	14,776	$	33,126	$	76,715	$	40,500

Leasing commissions:
Recurring⁽¹⁾	$	2,195	$	4,304	$	2,978	$	6,499	$	11,203
Non-recurring⁽¹⁾		263		1,124		470		1,648		5,389

Total leasing commissions	$	2,458	$	5,428	$	3,448	$	8,147	$	16,592

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	15,846	$	12,444	$	24,742	$	59,663	$	47,185
Total non-recurring⁽¹⁾		17,096		11,679		14,073		38,115		19,068

Total capital expenditures, tenant improvements and leasing commissions	$	32,942	$	24,123	$	38,815	$	97,778	$	66,253

Development expenditures: ⁽¹⁾
One Market Plaza—Lobby and Retail repositioning	$	—	$	3,421	$	196	$	4,656	$	12,588
1633 Broadway—Plaza and Retail development		1,119		2,873		2,783		6,945		3,845
Residential Development Fund		1,748		679		1,076		3,976		1,255
Other		324		—		570		1,285		—

Total development expenditures	$	3,191	$	6,973	$	4,625	$	16,862	$	17,688

⁽¹⁾	See page 43 for our definition of this measure.

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		CASH BASIS CAPITAL EXPENDITURES - NEW YORK

(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	4,556	$	2,822	$	665	$	7,750	$	4,574
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	4,556	$	2,822	$	665	$	7,750	$	4,574

Tenant improvements:
Recurring⁽¹⁾	$	3,514	$	2,703	$	11,351	$	26,554	$	20,744
Non-recurring⁽¹⁾		15,199		5,742		12,358		31,468		8,076

Total tenant improvements	$	18,713	$	8,445	$	23,709	$	58,022	$	28,820

Leasing commissions:
Recurring⁽¹⁾	$	1,880	$	4,090	$	1,829	$	4,396	$	8,925
Non-recurring⁽¹⁾		199		638		382		1,240		2,316

Total leasing commissions	$	2,079	$	4,728	$	2,211	$	5,636	$	11,241

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	9,950	$	9,615	$	13,845	$	38,700	$	34,243
Total non-recurring⁽¹⁾		15,398		6,380		12,740		32,708		10,392

Total capital expenditures, tenant improvements and leasing commissions	$	25,348	$	15,995	$	26,585	$	71,408	$	44,635

Development expenditures: ⁽¹⁾
1633 Broadway—Plaza and Retail development	$	1,119	$	2,873	$	2,783	$	6,945	$	3,845
Other		324		—		570		1,285		—

Total development expenditures	$	1,443	$	2,873	$	3,353	$	8,230	$	3,845

⁽¹⁾	See page 43 for our definition of this measure.

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		CASH BASIS CAPITAL EXPENDITURES - WASHINGTON, D.C.
(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	588	$	809	$	277	$	1,665	$	3,397
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	588	$	809	$	277	$	1,665	$	3,397

Tenant improvements:
Recurring⁽¹⁾	$	79	$	1,433	$	1,538	$	2,008	$	4,851
Non-recurring⁽¹⁾		188		4,813		160		2,468		5,603

Total tenant improvements	$	267	$	6,246	$	1,698	$	4,476	$	10,454

Leasing commissions:
Recurring⁽¹⁾	$	56	$	—	$	573	$	629	$	731
Non-recurring⁽¹⁾		26		486		88		370		3,073

Total leasing commissions	$	82	$	486	$	661	$	999	$	3,804

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	723	$	2,242	$	2,388	$	4,302	$	8,979
Total non-recurring⁽¹⁾		214		5,299		248		2,838		8,676

Total capital expenditures, tenant improvements and leasing commissions	$	937	$	7,541	$	2,636	$	7,140	$	17,655

⁽¹⁾	See page 43 for our definition of this measure.

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		CASH BASIS CAPITAL EXPENDITURES - SAN FRANCISCO
(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	1,353	$	249	$	1,141	$	3,244	$	1,113
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	1,353	$	249	$	1,141	$	3,244	$	1,113

Tenant improvements:
Recurring⁽¹⁾	$	3,556	$	85	$	6,634	$	11,686	$	1,226
Non-recurring⁽¹⁾		1,446		—		1,085		2,531		—

Total tenant improvements	$	5,002	$	85	$	7,719	$	14,217	$	1,226

Leasing commissions:
Recurring⁽¹⁾	$	259	$	214	$	576	$	1,474	$	1,547
Non-recurring⁽¹⁾		38		—		—		38		—

Total leasing commissions	$	297	$	214	$	576	$	1,512	$	1,547

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	5,168	$	548	$	8,351	$	16,404	$	3,886
Total non-recurring⁽¹⁾		1,484		—		1,085		2,569		—

Total capital expenditures, tenant improvements and leasing commissions	$	6,652	$	548	$	9,436	$	18,973	$	3,886

Development expenditures: ⁽¹⁾
One Market Plaza—Lobby and Retail repositioning	$	—	$	3,421	$	196	$	4,656	$	12,588

⁽¹⁾	See page 43 for our definition of this measure.

- 41 -


		CASH BASIS CAPITAL EXPENDITURES - OTHER
(unaudited and in thousands)


	Three Months Ended						Nine Months Ended
	September 30, 2016		September 30, 2015		June 30, 2016		September 30, 2016		September 30, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	5	$	39	$	158	$	257	$	77
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	5	$	39	$	158	$	257	$	77

Tenant improvements:
Recurring⁽¹⁾	$	—	$	—	$	—	$	—	$	—
Non-recurring⁽¹⁾		—		—		—		—		—

Total tenant improvements	$	—	$	—	$	—	$	—	$	—

Leasing commissions:
Recurring⁽¹⁾	$	—	$	—	$	—	$	—	$	—
Non-recurring⁽¹⁾		—		—		—		—		—

Total leasing commissions	$	—	$	—	$	—	$	—	$	—

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	5	$	39	$	158	$	257	$	77
Total non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures, tenant improvements and leasing commissions	$	5	$	39	$	158	$	257	$	77

Development expenditures: ⁽¹⁾
Residential Development Fund	$	1,748	$	679	$	1,076	$	3,976	$	1,255

⁽¹⁾	See page 43 for our definition of this measure.

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		DEFINITIONS

Funds from Operations (“FFO”) is a supplemental measure of our performance. FFO is presented in accordance with the definition adopted by National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including the pro rata share of such adjustments of unconsolidated joint ventures. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gain on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO attributable to common stockholders represents the Company’s pro rata share of FFO that is attributable to common stockholders and is calculated by reducing from FFO, the noncontrolling interests’ share of FFO in consolidated joint ventures, real estate funds and Operating Partnership.

Core Funds from Operations (“Core FFO”) is an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of acquisition and transaction related costs, unrealized gains or losses on interest rate swaps, severance costs and defeasance and debt breakage costs, in order to reflect the Core FFO of our real estate portfolio and operations. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. Core FFO attributable to common stockholders represents the Company’s pro rata share of Core FFO that is attributable to common stockholders and is calculated by reducing from Core FFO, the noncontrolling interests’ share of Core FFO in consolidated joint ventures, real estate funds and Operating Partnership.

Funds Available for Distribution (“FAD”) is a supplemental measure of our operating performance and is calculated as Core FFO less (i) recurring tenant improvements, leasing commissions and other capital expenditures, (ii) straight-line rent adjustments, (iii) unrealized gain on real estate fund investments and (iv) amortization of above and below-market leases, net, plus (v) amortization of stock-based compensation expense and (vi) amortization of deferred financing costs. FAD is commonly used in the real estate industry along with cash flow from operating activities as a measure of the ability to generate cash from operations and the ability to fund cash needs and make distributions to our stockholders. FAD provides supplemental information regarding our operating performance that would not otherwise be available and is useful to investors and analysts in assessing our operating performance. Additionally, although FAD is not intended to be a liquidity measure, as it does not make adjustments for the changes in working capital, we believe that FAD may provide investors and analysts with useful supplemental information regarding our ability to generate cash from operations and our ability to make distributions to our stockholders. Furthermore, we believe that FAD is frequently used by investors and analysts in evaluating our performance as a REIT. FAD attributable to common stockholders represents the Company’s pro rata share of FAD that is attributable to common stockholders and is calculated by reducing from FAD, the noncontrolling interests’ share of FAD in consolidated joint ventures, real estate funds and Operating Partnership.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is calculated as net income plus interest expense, income taxes, depreciation and amortization expenses. EBITDA provides supplemental information regarding our operating performance that would not otherwise be available and may be useful to an investor in assessing our ability to incur and service debt. EBITDA should not be considered as (i) a substitute for net income determined in accordance with GAAP, (ii) a substitute for net cash flows from operating activities determined in accordance with GAAP, (iii) an indication of our financial performance, or (iv) a measure of our liquidity. We also present our pro rata share of EBITDA which represents our share of EBITDA generated by our consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

Adjusted EBITDA is calculated by adjusting EBITDA to eliminate the impact of the performance of our real estate funds, gains and losses on interest rate swaps, acquisition and transaction costs and certain other items that may vary from period to period. We also present our pro rata share of Adjusted EBITDA, which represents our share of the Adjusted EBITDA generated by our consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Adjusted EBITDA helps compare our operating performance from period to period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps), certain non-cash expenses (primarily depreciation and amortization on our assets), the formation and performance of our real estate funds and acquisition and transaction costs that may vary from period to period. In future periods, we may also exclude other items from Adjusted EBITDA that we believe may help investors compare our results. Adjusted EBITDA should not be considered as a substitute for net income (loss) determined in accordance with GAAP. Other real estate companies may use different methodologies for calculating Adjusted EBITDA or similar metrics, and accordingly, our presentation of Adjusted EBITDA may not be comparable to other real estate companies.

- 43 -


		DEFINITIONS - CONTINUED

Net Operating Income (“NOI”) is a metric we use to measure the operating performance of our properties. NOI consists of property-related revenue (which includes rental income, tenant reimbursement income and certain other income) less operating expenses (which includes building expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present our Pro rata share of NOI and Cash NOI which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We used NOI and Cash NOI as metrics to measure the operating performance of our properties. We use these metrics internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at property level. Other real estate companies may use different methodologies for calculating NOI and Cash NOI, and accordingly, our presentation of NOI and Cash NOI may not be comparable to other real estate companies.

Same Store NOI is used to measure the operating performance of our properties that were owned by us in a similar manner during both the current period and prior reporting periods. Same Store NOI includes our share of NOI from unconsolidated joint ventures. We also present Same Store Cash NOI, which excludes the effect of non-cash items such as the straight-lining of rental revenue and the amortization of above and below-market leases. Additionally, we present our pro rata share of Same Store NOI and Same Store Cash NOI which represents our share of Same Store NOI and Same Store Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

Pro rata Share of Total Debt represents our share of debt of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We believe that pro rata share of total debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and excludes the noncontrolling interests share of debt from consolidated joint ventures that is attributable to our partners. Pro rata share of total debt should not be considered as a substitute for total debt determined in accordance with GAAP and should only be considered together with and as a supplement to the total debt determined in accordance with GAAP.

Annualized Rent represents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12.

Leased % represents percentage of square feet that is leased, including signed leases not yet commenced.

Occupied % represents the percentage of space for which we have commenced rental revenue in accordance with GAAP.

Initial Rent represents the weighted average cash basis starting rent per square foot and does not include free rent or periodic step-ups in rent.

Prior Escalated Rent represents the weighted average cash basis rent (including reimbursements) per square foot at expiration.

Second Generation Space represents space leased that has been vacant for less than twelve months.

Capital Expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring Capital Expenditures include capital expenditures to maintain current revenues and tenant improvements and leasing commissions related to space leased that has been vacant for less than twelve months. Nonrecurring Capital Expenditures include capital expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions on space leased that has been vacant for more than twelve months. Development Expenditures consist of hard and soft costs related to the development of a property in getting it ready for its intended use.

- 44 -

COMPANY INFORMATION

Corporate Headquarters

Investor Relations

Stock Exchange Listing

Trading Symbol

1633 Broadway, Suite 1801

IR@paramount-group.com

New York Stock Exchange

New York, NY 10019

(212)492-2298

(212) 237-3100